Frankly, there’s little credibility in a major insurance company
spending beaucoup bucks on a ballot measure just so it can offer
motorists a discount.
Come on. We weren’t born yesterday. Were you?
But that is what Mercury Insurance wants you to swallow. The
insurance giant says it is spending millions on Proposition 17 so it can
offer hard-working California motorists a “continuous coverage
discount” if you switch insurance carriers to Mercury, something they
can’t offer now except to their own clients. Their commercials –
increasingly aggressive – now say their ballot measure will reduce your
car insurance premiums by hundreds of dollars.
Right. And we have some ocean-front property in Irwindale to sell
Consumer groups and others have tested these claims by doing what
you should always do when shopping for insurance, a new car, or these
days, when going to the voting booth. They did their homework. They
asked a knowledgable third party, the California Department of
Guess what? The CDI anlaysis says no, this goes against the
ratemaking principles established in state law of “zero-sum.” The CDI
concluded: “If an insurer offers a continuous coverage discount for some
drivers it will result in a surcharge for other drivers. This is
because automobile insurance discounts and surcharges must offset one
another so that each rating factor applied by an insurer is evenly
balanced within the insurer’s rating plan.”
In short, there will be winners and losers if Prop. 17 passes. Some
will save money but many more will pay more for car insurance. After
all, Mercury isn’t spending millions on its own hand-written ballot
measure to lose money.
The beauty of this clever deception is no one can be sure who wins
and who loses, not even the Department of Insurance, because Mercury
and other insurance companies can simply submit a new rate plan the day
after the June 8 election.
What others say, such as Consumer Watchdog, if Prop. 17 is approved
is that automobile insurance companies will then be able to tack on
surcharges to these folks:
Senior citizens who’ve stopped driving for whatever reasons –
surgery, hospitalization – and then restarted their insurance.
Members of the armed forces stationed in the United States when they
return and restart their insurance. That’s right, Prop. 17 penalizes
those in the military serving stateside.
Anyone who misses a payment and has their insurance canceled and now
wants to restart it.
Someone who lost a job and stopped driving, then started driving
again after finding a job. Or anyone taking public transit who returned
to driving and needed car insurance again.
These are just some of the surcharge opportunities made possible by
Prop. 17, which throws out the rules of the true voter-approved
insurance reform measure, 1988’s Prop. 103, and inserts caveats that
will nickel and dime future policy holders. Worst of all, it hurts
those who have gone without insurance by adding the “lapse surcharge”
when they sign up. Think about it. For those who abide by the law and
buy car insurance, it is in their best interest to encourage those
driving without it to get insurance. By adding surcharges to new
startups, Prop. 17 discourages drivers from buying first-time insurance
and increases the chances of being hit by an uninsured driver.
We can’t trust Mercury Insurance or any big, special interest that
goes out and buys a ballot proposition. Call us extra cautious, but we
don’t want to see yet another ballot measure get approved that doesn’t
do what proponents say it will. On June 8, vote “no” on Prop. 17.