Insurance Company Sponsors Initiative
SAN DIEGO, CA — The Continuous Coverage Auto Insurance Discount Act may sound appealing, but the consumer advocacy group Consumer Watchdog told 10 News that potential voters should not be fooled, calling the measure a thinly veiled attempt to raise insurance rates.
“It’s a fraud. It’s full of deception. It will lead to higher insurance premiums,” said Harvey Rosenfield, founder of Consumer Watchdog and author of Proposition 103, which overhauled the insurance market in 1988.
He said that under the proposed initiative, rates could go up for just calling and questioning coverage rules. After an accident, the driver who was not at fault could be penalized. Plus, he said, there would be penalties for letting insurance lapse, even for the unemployed or U.S. service members stationed in the United States.
The language of the proposal was just approved by the California Attorney General. Now, a signature gathering campaign has begun.
“It’s going to be appearing at a supermarket near you where paid signature gatherers are going to be paid 75 cents to a dollar to confuse you into signing that initiative on the ballot,” Rosenfield said.
There may also be confusion over who is behind the measure. It’s signed by Christina Wilson, a proponent. However, Rosenfield said that it is really sponsored by auto insurance giant Mercury Insurance and its billionaire Chairman George Joseph.
When 10 News called Mercury Insurance for a comment, Kathy Fairbanks of Californians For Fair Auto Insurance Rates returned the call and said that Rosenfield is being misleading. Fairbanks said that the initiative will allow drivers to keep the continuous coverage discount even if they switch insurance companies. She agreed Mercury Insurance is the sole financial backer at this point, but said the measure will also be supported by consumer groups, seniors, and small businesses.
Rosenfield said it’s an attempt to roll back consumer gains from Prop 103, and he said the insurance Commissioner, Steve Poizner, should speak out against the measure.
Poizner, interviewed by 10 News, said “it’s definitely worth being skeptical” of initiatives backed by insurance companies.
When asked if he would take a position on the initiative, he said, “We’re going to finish our analysis first and then, depending on how it turns out, we’ll see if I just inform the voters or I weigh in or not. But I need to finish the analysis first.”