Californians should have no trouble figuring out how to vote on
Proposition 17, the auto insurance measure. All they have to do is ask
themselves if Mercury Insurance Co., which spent $3.5 million to
qualify and support the initiative, has consumers’ welfare or its own
financial interests in mind.

Prop. 17, which is almost entirely funded by Mercury Insurance, is
designed to fool voters into believing it is simply a change in the law
that would allow insurers to offer a “continuous coverage” discount on
policies to new customers who switch auto insurance companies.

Customers generally would be eligible for the discounts if their
coverage had not lapsed for more than 90 days in the past five years.
If the lapse occurred because of military service abroad, the discount
would still be available.

But that is hardly the whole story. Insurance companies also would
be allowed to increase the cost of insurance to drivers who dropped
their car insurance for 91 days or more in the past half decade.

Huge surcharges of several hundred dollars or more would be allowed
even for motorists with good driving records. The fact is many
Californians have had lapses in their auto insurance when they served
in the military, went to college, suffered illnesses, lost their jobs
or lived in a large city with good public transportation.

The threat of paying surcharges appears, in part, to be designed to
force some people to pay for auto insurance during periods when they do
not need it.

Prop. 17 does not stipulate the size of surcharges or discounts. But
it doesn’t take a financial wizard to conclude that insurance companies
are likely to take in far more money in surcharges than they dole out
in discounts. Why else would Mercury spend millions of its own dollars
on the measure?

Voters should be aware that drivers in states that do allow
surcharges like the ones Mercury seeks often pay much higher premiums.
The surcharges could be so steep that drivers would be unable to afford
coverage and would join the large number of uninsured motorists on
California’s roads.

Like Prop. 16, which is designed to limit competition for PG&E,
Prop. 17 is the second measure on the June ballot that was initiated
and financed by a single company for its own benefit at the expense of
the public interest.

These propositions are base abuses of the initiative process, which
was created to protect the public against special interests and
government favoritism or failure to adequately address important issues.

We trust that voters will see through Mercury Insurance Co.’s deception and urge them to soundly reject Prop. 17 on June 8.