Proposition 33 on the Nov. 6 ballot is a testament, or an indictment, of one auto insurance company's dogged pursuit of recruiting customers while charging more to Californians who are either buying policies for the first time or have let their coverage lapse.
This measure closely resembles 2010's Proposition 17, which voters rejected.
Which is just what should happen this time around, too. The same fundamental question we asked in 2010 when urging Prop. 17 be defeated applies to Prop. 33 this year: Should insurance companies be able to charge higher rates to people who are new to buying policies or have dropped coverage and now want it again?
No and no. Ask yourself: Why should the law be changed to discourage people from buying auto insurance?
Prop. 33 is, like 17, primarily funded by George Joseph, the wealthy founder of an auto insurance company, Mercury General Corp. The "new" measure has been given a makeover of sorts, but doesn't alter its fundamental premise of changing existing state law so that insurers can offer discounts for so-called "continuous coverage" to motorists who want to switch companies. The upshot is that this would be a recruiting tool for Mercury to attract customers from other insurers.
This discount, however, would be paid for by giving Mercury and other insurers the go-ahead to collect more from the non-insured.
At present, auto insurers are prohibited from this practice under 1988's voter-approved Proposition 103, which prohibits insurers from offering discounts or setting rates based on factors such as a customer's history of maintaining insurance coverage. Instead, said 103, insurers needed to base rates mainly on risk factors, such as an applicant's prior driving record, experience and number of miles regularly driven.
Prop. 33, however, would change this by allowing insurers to offer discounts to drivers who have had continuous coverage — without basing this on risk factors.
The new measure makes a couple of changes from Prop. 17: Military personnel on active duty and a select number of unemployed state residents — those who lost jobs because of a layoff or furlough — would qualify for the full discount even if their prior policies had lapsed.
But that doesn't help the vast majority of applicants who are new to the market or have let coverage lapse: Students who have graduated and are on their own to purchase auto insurance, someone who might be buying their first car, or members of a family who stopped driving and canceled their insurance to save money, but now need to resume coverage.
According to the California Department of Insurance, Mercury Insurance overcharged and discriminated against California customers for 15 years. The company's founder, Joseph, has a track record of giving money to state politicians to get state law changed to benefit Mercury, and when that failed, abusing the state initiative process with his self-serving propositions.
Voters should once again see through Mercury's longstanding attempts to change state insurance law in a way that would not only discourage some motorists from buying auto polices, but would also encourage them to drive without any coverage, which costs the rest of us.
Hopefully, another rejection will ensure this measure is sent away for good. Vote no on Prop. 33.