Consumer Watchdog Campaign Release: Mercury Hikes Auto Insurance Rates in California By $63 Million, More Proof that Prop 33’s Promises of Discounts Are False Say Consumer Advocates

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Santa Monica, CA – Mercury General is raising auto insurance rates by $63 million on its customers, an average 4% rate hike for 990,000 Mercury auto insurance policyholders in California. The rate hike comes just ahead of a November vote on Proposition 33, funded by Mercury Chairman George Joseph, which would allow insurance companies to further increase premiums on millions of good drivers. Consumer advocates said that Mercury’s pre-election rate hike is more proof that Prop 33 is a deception and its promised discounts are phony.

Prop 33 will allow insurance companies to raise rates on millions of responsible drivers who have a break in coverage for good reasons, such as illness, financial hardship, or using public transit. These responsible drivers would face higher rates under Prop 33, said Consumer Watchdog Campaign.

“Insurance billionaire George Joseph doubled down on Prop 33 last week, increasing his spending on the measure to $16.4 million in his attempt to deceive the public and buy the vote,” said Carmen Balber with Consumer Watchdog Campaign. “At the same time Joseph’s Mercury Insurance is increasing premiums on its own customers by $63 million. Mercury’s pre-election rate hike is more proof that Prop 33’s promises of discounts can’t be trusted."

In late September, the insurance commissioner approved an average 4.3% increase for customers of Mercury Insurance Company, and an average 3.6% rate increase for policyholders with Mercury Casualty Company and California Automobile Insurance Company. Mercury had requested an even larger rate hike that would have increased rates another $29 million, but was blocked by a Consumer Watchdog challenge under California’s insurance reform law, Proposition 103.

Mercury can expect even higher returns in the near future, according to financial analysts at Stifel/Nicolaus, as the fuel crisis hikes gas prices and motorists drive less – thus reducing the number of accidents.

Prop 33 is just the latest in a long history of Mercury's broken promises to California consumers and illegal practices that illustrate to voters why Mercury Insurance can’t be trusted. The company’s checkered history includes:

  • A recent California Department of Insurance enforcement action against the company, in which the Department stated that: “Mercury has a deserved reputation for abusing its customers and intentionally violating the law with arrogance and indifference."
  • Internal reports prepared by California Department of Insurance investigators that show that Mercury used a variety of internal company rules – many unwritten – to overcharge or refuse to sell insurance to many Californians it deemed "unacceptable," including Americans serving in the military, small businesspeople, unmarried people living together, people with diabetes, and the unemployed.
  • Years during which Mercury illegally surcharged hundreds of thousands of drivers for a lack of prior insurance coverage, until the insurer was ordered by a court to stop in 2005. These illegal surcharges are the same price increases Joseph is trying to enact with Prop 33.
  • An internal training manual produced in a civil trial that reveals how Mercury Insurance trained employees to mistreat, neglect and even threaten customers who file claims.
  • Allowing its insurance agents to charge illegal broker fees to unsuspecting customers until Mercury was forced to stop by a California court.
  • Customer satisfaction rankings that consistently scrape the bottom of the barrel, in surveys conducted by JD Powers and Consumer Reports.
  • Sponsoring Prop 17, which voters rejected at the ballot in 2010 and would have imposed the same surcharges on good drivers that Prop 33 will enact.

Find detailed information on each of these consumer abuses and illegal practices at: and

For more information about Prop 33 visit


Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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