Frankly, there’s little credibility in a major insurance company spending
beaucoup bucks on a ballot measure just so it can offer motorists a
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 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 say their ballot measure
will reduce your car insurance premiums by hundreds of dollars.
Consumer groups and others have tested these claims by asking a
knowledgable third party, the California Department of Insurance.
Guess what? The CDI analysis 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 Proposition 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.
What others say, such as Consumer Watchdog, is that if
Proposition 17 is approved 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, Proposition
17 penalizes those in the military serving stateside.
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. Or someone who was in college and couldn’t afford a
car, but now can.
Worst of all, Proposition 17 hurts those who have gone without
insurance by adding the "lapse surcharge" when they sign up – and the
surcharge lasts five years, while the discount is just for six months.
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 start-ups, Proposition 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. Vote "no" on Proposition