SAN DIEGO, CA — To some, the proposed initiative known as the Continuous Coverage Auto Insurance Discount Act sounds appealing.

But consumer advocacy group Consumer Watchdog told 10News that
potential voters should not be fooled. They said the initiative is a
thinly veiled attempt to raise insurance rates.

“It’s a fraud, it’s full of deception, it will lead to higher
insurance premiums,” said Harvey Rosenfield, founder of Consumer
Watchdog group and author of Proposition 103, which overhauled the
insurance market in 1988.

Rosenfield said that under the proposed initiative rates could go up
for just calling and questioning coverage rules. After an accident, the
driver who was not at fault could be penalized. Plus, he said, there
would be penalties for letting insurance lapse, even for the unemployed
or U.S. service members stationed in the United States.

The language of the proposal was just approved by the California
Attorney General. Now, a signature gathering campaign has begun.

“It’s going to be appearing at a supermarket near you where paid
signature gatherers are going to be paid 75 cents to $1 to confuse you
into signing that initiative on the ballot,” Rosenfield said.

There may also be confusion over who is behind the measure because
it’s signed by Christina Wilson, proponent. However, Rosenfield said
that it is really sponsored by auto insurance giant Mercury Insurance
and its billionaire chairman George Joseph.

Kathy Fairbanks of Californians for Fair Auto Insurance Rates said
that Rosenfield is being misleading. Fairbanks said that the initiative
will allow drivers to keep the continuous coverage discount even if
they switch insurance companies. She agreed Mercury Insurance is the
sole financial backer at this point, but said the measure will also be
supported by consumer groups, seniors and small businesses.

Rosenfield said it’s an attempt to roll back consumer gains from
Prop. 103, and he said Insurance Commissioner Steve Poizner should
speak out against the measure.

Poizner, interviewd by 10News, said “It’s definitely worth being skeptical” of insurance company-backed initiatives.

Asked if he would take a position on the initiative, Poizner said,
“We’re going to finish our analysis first and then depending on how it
turns out we’ll see if I just inform the voters or I weigh in or not.
But I need to finish the analysis first.”