Proposition 17 – or the continuous coverage discount initiative – is giving California drivers a say on insurance companies’ discount logistics.
Under Prop 17, drivers can be awarded a continuous coverage discount, even if they switch insurance providers – as long as they have some form of consistent auto insurance. If there is a lapse in coverage for more than 90 days, the discount will be taken away. Currently, drivers can be awarded continuous coverage discounts, but only within one insurance company. If drivers’ switch providers, they lose their continued coverage discount.
The proposition aims to overturn Proposition 103, which California voted into law in 1988 and included that insurance providers could not use information about a driver’s previous insurance coverage to determine rates.
The California Department of Insurance said it cannot predict the fiscal impact Prop 17 would have for California. For some people, rates may be higher, while for others auto insurance will be lower.
“It is difficult to predict with any sort of accuracy,” said CDI press secretary Darrel Ng. “[The financial impact] is based on a number of variables that cannot be predicted.”
Former Lieutenant Governor and California Representative John Garamendi (D-East Bay) is against Prop 17 and co-authored the California voter guide argument against the proposition. The “No on Prop 17” campaign also includes advocates from Consumer Watchdog, a nonprofit group that focuses on tax and consumer issues.
Consumer Watchdog director of public affairs Naomi Seligman said in an e-mail interview Prop 17 is full of surcharges that will take money from Californians and give it to insurance companies, such as the Mercury Insurance Group.
“Mercury Insurance and its chairman George Joseph have tried time and again to override Prop 103’s ban on the kind of surcharges Prop 17 would impose on Californians,” Seligman said.
Other problems the “No on Prop 17” campaign has found with the initiative include additional costs for senior citizens, the unemployed, military personnel and others who may not be able to pay for continuous auto insurance for a host of reasons.
“Mercury is not an honest broker,” Seligman said in regards to official reports released last month, prepared by CDI investigators and obtained by Consumer Watchdog. “Mercury showed a history of discrimination against members of the U.S. military, the unemployed, the disabled, small business people and unmarried adults living together.”
The “Yes on Prop 17” campaign, which Mercury Insurance is financially supporting, promotes the possibility of better rates and competition amongst insurance companies if Prop 17 passes.
Yes on Prop 17 spokesperson Kathy Fairbanks said students will feel the benefits, along with other California populations.
“One thing I think is really important is Prop 17 benefits a vast majority of California drivers,” Fairbanks said. “I don’t know if I’ve ever seen a ballot initiative that is a win for the vast majority of the population.”
The supporting campaign said there will not be any additional surcharges that do not already exist.
“Opponents say Prop 17 will result in [an additional] surcharge. They say someone is going to have to pay more,” Fairbanks said. “Prop 17 won’t make the surcharges worse. They exist under current law.”
Fairbanks said students and other Californians, such as deployed military personnel, worried about breeching the 90-day grace period between auto insurance coverage should know that individual insurance companies will be provided for exceptions and discretions, such as a quarter abroad.
Forty-nine U.S. states have passed laws similar to Prop 17, Fairbanks added.
SASHA LEKACH can be reached at email@example.com.