Editorial: Special-Interest Prop. 17 Won’t Benefit Drivers

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The competition is on this year to see which company — Mercury
Insurance or PG&E — is responsible for the worst abuse of
California’s initiative process. PG&E’s $28 million assault on
potential competition through Proposition 16 will be tough to top, but
Mercury Insurance is doing its best. It’s pumping $3.5 million into the
campaign to convince voters that Proposition 17’s change in insurance
regulation is in their best interests.

Don’t believe it. This is yet another in a long line of direct
attacks on Proposition 103, which California voters passed in 1988 to
rein in abuses of the insurance industry. It professes to be in
consumers’ interest, but it is anything but. Vote no in the June 8

The basic premise of Proposition 17 is that it would allow auto
insurance companies to offer a “continuous coverage” discount to new
customers who switched from one insurer to another. Proposition 103
prohibits that practice.

But that’s not the provision that has riled consumer advocates. It’s a
smoke screen for allowing insurance companies to substantially increase
rates for drivers who, for whatever reason, allowed their insurance to
lapse for more than 90 days. That could include a wide range of people,
such as drivers hospitalized for a long period of time, military
personnel or unemployed Californians who couldn’t keep up their premium

Mercury says this would not happen because of competition.

But anyone who was around California before the passage of
Proposition 103 knows the risk is not worth taking. Until that
proposition passed, insurance companies often imposed high rates on
drivers who had lapses in coverage, regardless of the reason. And
drivers were trapped because insurance is mandatory for drivers in this

Mercury Insurance sells Proposition 17 as benefiting consumers, but
it’s easy to see through the claim. Look at who’s opposing the
proposition and who’s backing it.

Serious consumer protection groups such as Consumers Union and
Consumer Watchdog are absolutely against Proposition 17. So is U.S. Rep.
John Garamendi, the former insurance commissioner, who is a longtime
advocate of insurance customers’ rights.

So who are the supporters? Mercury lists three so-called consumer
groups, and the San Diego Union-Tribune tracked them down. Two, the
Consumers Coalition of California and the California Alliance for
Consumer Protection, are “basically one-person operations that have
often taken pro-industry stances,” the Union-Tribune concluded. The
third, Consumers First, Inc., is “being paid $5,000 a month for its work
on Proposition 17. ”

Some business groups are for the proposition, but not one legitimate
consumer protection organization.

Californians like to romanticize the initiative process as direct
democracy by the people. Proposition 17, like PG&E’s
anti-competitive Proposition 16, is the opposite: a special interest
scam that would increase corporate profits and potentially harm
consumers. The only way to discourage this abuse of initiatives is for
voters to say an emphatic no when the worst ones come along. Don’t miss
the chance in this spring’s primary.

Consumer Watchdog
Consumer Watchdoghttps://consumerwatchdog.org
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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