The hottest places in hell are reserved for those who in times of great moral crisis maintain their neutrality
–Dante 1265-1321
A Double Surcharge On Uninsured Motorist For Every Alleged Single Discount For Middle Class.
Democrats Should Not Take Twice As Much From The Poor Under The Pretense of Giving Half As Much To the Rich.
All Motorists’ “Uninsured Motorist” Coverage Will Rise Higher. All Drivers’ Premiums Will Likely Be Higher Overall.
SB 689 is a blatant attack on the uninsured motorist, illegal as a violation of Prop 103, and an end run around the Insurance Commissioner‘s authority and court rulings. It surcharges uninsured motorists in violation of Section 1861.02( c ) of the Insurance Code.
‘ Uninsured motorists will face a surcharge, and therefore the cost of insurance will be prohibitive for many — more drivers will not purchase insurance. The cost of “uninsured motorist coverage” for all drivers to protect themselves, a separate portion of the premium, will go up. This is the fastest growing component of premiums to protect the insured driver against the uninsured.
‘ Mercury Insurance data filed with the Department of Insurance shows that the surcharge on uninsured motorists will be twice any potential discount for continuously insured motorists — since there are more insured to spread the discount out to and less uninsured to bear the penalty. The least able to afford insurance will see about a $125 premium surcharge to finance a potential $65 discount. However, with more uninsured on the road, everyone will pay more for uninsured motorist coverage. There is NO GUARANTEE in the bill THAT ANY DRIVER WILL PAY LESS OVERALL.
‘ The Insurance Commissioner sets rates lawfully because his office is best equipped to sort out this confusing statistical maze. The only reason Mercury has come to this legislature is because it is losing the battle at the Department and in the Courts. Voters prohibited the legislature from doing exactly this — allowing a surcharge for uninsured motorists. What kind of precedent does it set for an insurer to run to the legislature when the Insurance Commissioner and the Courts agree that a practice is wrong?
Got A Surcharge?
These uninsured motorists face a surcharge under Mercury Insurance’s SB 689:
‘ If your kid is in the Peace Corps, when she comes back she’ll be surcharged for a coverage lapse’
‘ When your teenager moves out and finds an apartment on her own’
‘ If you lose your job, cannot afford insurance for more than 90 days, and don’t even drive, you’ll be surcharged when you buy insurance again’
‘ If you stop driving to pay for your aging parent’s nursing care and discontinue insurance for more than 90 days’
‘ Every motorist who pays for “uninsured motorist” coverage, to protect themselves against uninsured drivers, will pay more for that coverage with more uninsured on the road’.
‘ Every motorist could pay more overall for coverage because there is no guarantee of an overall premium reduction for any driver in SB 689’.
‘ Surcharges will be at least twice as large as any potential discount since there are less uninsured surcharged and more drivers with continuous coverage discounted’.
Got A Lawyer?
Voter-approved Proposition 103 prevented insurers from surcharging previously uninsured motorists. Prop 103 also only allows legislative amendments that “further its purposes.” SB 689 violates Prop 103 and will result in in-depth litigation challenging the bill as unconstitutional.
Consumer advocates were successful in challenging another bill, SB 905, that did not further Prop 103‘s purposes — sponsored by insurance agents to reduce rate rollbacks by millions of dollars. Other legislation to protect an insurance company against Prop 103 rollbacks, lobbied by Clay Jackson when Alan Robins was State Senate Insurance Committee Chair, was invalidated in a landmark case before the California Supreme Court — Amwest vs. Wilson.
SB 689’For the Benefit of Insurers
