Editorial: Prop. 33 Benefits Insurers More Than Car Owners

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Proposition 33 on the Nov. 6 ballot is an industry-backed plan to change California law affecting the price of car insurance.

The Star recommends a "no" vote on Proposition 33 because its negative effects would outweigh any benefits to drivers and the public.

The ballot measure's major financial backer, to the tune of millions of dollars, is insurance magnate George Joseph, chairman of Mercury Insurance. He also was the major backer of Proposition 17, an unsuccessful 2010 initiative nearly identical to this year's Proposition 33.

If this ballot measure is approved by a majority of voters, car insurance companies could price their policies partly on a driver's history of insurance coverage. Companies already can give their customers a discount for "continuous coverage," but they can't offer the discount to new customers who switch from other companies.

According to state figures, California residents paid about $21 billion for their car insurance premiums in 2011. That much money provides a powerful incentive to lure customers away from competitors,  and insurers think the discount could help them do that.

However, Proposition 33 would have a significant, damaging consequence: It would actually increase the cost of insurance for some drivers who didn't maintain uninterrupted coverage, even if they had a valid reason and a spotless driving record. A driver may have dropped coverage because he or she didn't own a car or couldn't afford to operate it, or preferred to use mass transit or didn't drive due to  extended illness or unemployment.

Regardless of the reason for not having insurance — and we are quite aware that many drivers don't have it due to sheer irresponsibility — Proposition 33 would raise the cost for those drivers at the very moment they decide to buy a policy. The result is predictable: Fewer of them would buy it.

In The Star's view, any proposal that would tend to increase the number of uninsured drivers is a bad move. It's a threat to everyone on the road, including conscientious drivers who might enjoy the discount Proposition 33 is dangling in front of voters on Nov. 6.

It's a bad deal, even for good drivers. The Star recommends voting "no" on Proposition 33.

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