SACRAMENTO — Voters rejected Proposition 33, a measure that would have allowed car insurers to offer discounts to drivers who maintain continuous coverage and raise rates on those who do not have a consistent history of coverage.

Current state law enables insurers to offer loyalty discounts to drivers who maintain coverage with one company, but prohibits other companies from using discounts to attract customers. Under Prop. 33, insurers could have provided discounts based on drivers' continuous coverage with any company.

It was the second time in as many years that voters turned back efforts, led by George Joseph, chairman of insurer Mercury General Corp., to change two-decade old consumer protections.

Supporters of the measure – which received 99 percent of its funding from Joseph – said it would have increased competition in the market and lower rates for most drivers.

Opponents, led by Consumer Watchdog, said the new discounts would have to be offset by higher prices for drivers who, for reasons including long stints of unemployment, have let their insurance lapse, and could result in more uninsured drivers.

Critics also said the measure would have eroded consumer rights established by Proposition 103, an initiative approved in 1988 that said insurers cannot factor in a motorist's past coverage when setting rates.

Joseph contributed $16.9 million to the campaign for the measure, compared to $275,700 raised by the opponents.

In 2010, voters narrowly rejected Proposition 17, a measure similar to Prop. 33. But supporters of this year's effort said it would allow more drivers to get discounted rates than the measure two years ago.

Drew Joseph is a San Francisco Chronicle staff writer. E-mail: [email protected] Twitter: @drewqjoseph