California Automobile Insurance Prices Based on History of Insurance Coverage (2012)
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11-0013 is similar to Proposition 17, which was on the June 8, 2010 ballot. Proposition 17 was narrowly defeated. Unlike Proposition 17, #11-0013 exempts soldiers and those who have been unemployed for 18 months from paying more after a lapse in persistency.[3]
If #11-0013 is approved, it will allow insurers to offer discounts to new customers who can prove they were continuously covered by any licensed auto insurance company over the previous five years. These discounts are known as "persistency discounts" or "loyalty discounts" and under current California law, insurance companies can only offer them to existing customers.[4]
The fight over #11-0013, and automobile insurance persistency discounts in general, began in 1988, when Proposition 103 was approved. Proposition 103 forbids the type of persistency discounts that #11-0013 would allow.
Ballot language
Ballot title
Official summary
- "Changes current law to permit insurance companies to set prices based on whether the driver previously carried auto insurance with any insurance company. Allows insurance companies to give proportional discounts to drivers with some prior insurance coverage. Will allow insurance companies to increase cost of insurance to drivers who have not maintained continuous coverage. Treats drivers with lapse as continuously covered if lapse is due to military service or loss of employment, or if lapse is less than 90 days."
Fiscal impact
(This is a summary of the initiative's estimated "fiscal impact on state and local government" prepared by the California Legislative Analyst's Office and the Director of Finance.)
- "Probably no significant fiscal effect on state insurance premium tax revenues."
Support
Supporters
- The California Republican Party voted to endorse the measure at their annual state convention, held in February 2012.[5]
- Don Perata, former California State Senate president pro tempore.. He says, "This initiative does what most states have done successfully and allows the consumer to control the discount. This is not a party issue. This is a fairness question, and as a legislator and policymaker, I always supported the portability of this discount. It just makes sense."[6]
- Juan Vargas (D-San Diego), former Chair of the Assembly Insurance Committee.[6]
Donors
George Joseph, who chairs insurance company Mercury General, has contributed $8.1 million to the campaign in favor of the proposal as of mid-September 2011.[4] Joseph, a billionaire, was the 385th richest man in American in 2011.[3]
Opposition
- Brian Stedge of Consumer Watchdog says, "Mercury Insurance is back with another costly ballot initiative which attempts to trick voters into giving insurance companies new power to increase premiums and punish consumers. Mercury Insurance has a terrible history of mistreating its customers, ignoring the law and trying to deceive voters, and Californians need to know that you can't trust Mercury Insurance. The last thing Californians' need is another self-serving ballot initiative by a corporation hell bent on increasing its profit margins on the backs of already struggling families."[7]
- Richard Holober, Executive Director of the Consumer Federation of California, says, "When was the last time a billionaire insurance magnate spent a fortune to save you money? Never. This proposition is nothing more that an insurance tycoon's self-enrichment scheme."[8]
Path to the ballot
- See also: California signature requirements
Sponsors of 11-0013 needed to collect 504,760 signatures by January 9, 2012 to qualify the measure for the ballot. Its supporters turned in over 800,000 signatures in mid-November 2011, several months before the deadline.[2]
The letter requesting a title and summary for the proposed initiative was signed by Mike D’Arelli. D'Arelli is the executive director of the American Agents Alliance, an insurance trade group.[9]
External links
- Letter requesting a ballot title for Initiative 11-0013
- 2012 Automobile Discount Insurance, website in favor of the initiative
References
- ↑ Sacramento Bee, "Auto rate initiative qualifies for California ballot", January 18, 2018
- ↑ 2.0 2.1 Sacramento Bee, "Backers of California auto rate initiatives submit signatures", November 16, 2011
- ↑ 3.0 3.1 Los Angeles Times, "A bad 'discount' on car insurance", September 21, 2011
- ↑ 4.0 4.1 Los Angeles Times, "Insurance exec contributes $8.1 million to initiative campaign", September 13, 2011
- ↑ Sacramento Bee, "California Republican Party endorses auto rate initiative", February 26, 2012
- ↑ 6.0 6.1 Insurance Journal, "Auto Insurance Discount Initiative May be Gaining Bipartisan Endorsement", March 16, 2012
- ↑ PRNewswire, "CA Attorney General Says Proposed Initiative Gives Auto Insurers New Power to Raise Rates", August 12, 2011
- ↑ Sacramento Bee, "Zombie Initiative Alert: Mercury Insurance Prop 17 is Back from the Dead", January 19, 2012
- ↑ Los Angeles Times, "Mercury chairman backs another auto-insurance discount initiative", August 12, 2011
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