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SACRAMENTO, CA (KGO) — The battle over Proposition 17 on the June
ballot is heating up. The measure could change auto insurance rates and
both sides of the issue say they say they are protecting consumers.
There are two major players. One is Consumer Watchdog, the group
that sponsored Prop 103 insurance reform back in 1988, and is now
opposing this measure. On the other side, Mercury Insurance Company has
contributed $10 million to support Prop 17.
It has been called a classic David and Goliath battle that is now
taking place on the airwaves.
“Prop 17 fixes the law so drivers can take their continuous coverage
with them,” one ad proclaims.
The ad has been running for weeks and says Proposition 17 will save
money for 80 percent of Californians with “continuous auto insurance
coverage.”
“Why are car insurance companies spending millions to pass Prop 17?”
another ad asks.
The ad, which just began airing on May11, notes that Prop 17 is
backed by industry giant Mercury Insurance Company. It claims that Prop
17 will raise insurance rates for millions.
“The thing that people will be asking themselves is since when has
an insurance company spent millions of dollars to put a proposition on
the ballot that will save you money and the answer of course is never,”
says Harvey Rosenfield with Consumer Watchdog.
Rosenfield says Prop 17 weakens consumer protections by allowing
rate hikes based on coverage history. Mercury Insurance, however, says
Prop 17 is good for consumers. They say drivers will be able to change
insurance without losing continuous coverage discounts.
“What this does is this actually benefits the consumer, this
proposition does, by making it portable and by making and forcing
companies to be a lot more competitive,” says insurance agent John
Morton.
Prop 17 lets insurance companies offer discounts to drivers with
continued coverage, but it also allows rate increases for drivers
without it.
Mercury Insurance has poured $10 million into the campaign to keep
ads running. Consumer Watchdog raised about $500,000 to run ads and
hopes to raise more.
