For the last 25 years, I’ve worked day and night to keep insurance rates low here in California. That’s why I’m OPPOSED to PROP 33, the Mercury Insurance Company Initiative…and I need your help to get the word out.

Prop 33 will allow insurance companies to raise rates on good drivers who’ve done nothing wrong. It legalizes huge surcharges (hundreds, or even thousands of dollars) on consumers just because they did not previously have auto insurance – even if they didn’t own a car, or didn’t drive. Motorists would pay more if they had a lengthy lapse in coverage through no fault of their own – because they were sick or haven’t been able to get a job since the 2008 financial crash.

We all know the special interests are trying to steal the election today. But I still couldn’t believe it when I opened the Los Angeles Times this past weekend and saw a huge ad featuring two people claiming to be former state “insurance commissioners,” saying that Proposition 33 will help consumers. They both work for the insurance industry!

The billionaire chairman of Mercury Insurance, a company that has consistently misled regulators and broken state insurance rules, paid for that deceitful advertisement and the entire Prop 33 deceptive campaign. He’s spent $17 million so far. We don’t have the millions to fight back with our own ads. But you can help me defeat Prop 33 by warning your family and friends to VOTE NO ON PROP 33.

Forward this blog to them, or use this link to send them an email, post it on your Facebook page or tweet it before polls close tonight.

The Prop 33 surcharges were a huge problem back in the 1980s, and led to more uninsured motorists on the road and higher rates for everyone. That’s why, when I wrote Proposition 103 back in 1987, I put in a protection against these surcharges, and we Californians passed it. Proposition 33 actually repeals that protection.

Prop 33 will punish students, seniors, mass transit commuters, even military spouses and veterans.

Just ask yourself this question: When was the last time an insurance company and its executives put a proposition on the ballot to save you and me money?

Never.

In fact, a few days ago Mercury Insurance Chairman George Joseph admitted to a Los Angeles Times reporter that he’s just using the initiative process to make more money for himself and his company.

That’s why every major newspaper in California is urging people to vote NO on 33.

Just two years ago, California voters rejected a ballot measure by Mercury Insurance that was almost identical to Proposition 33.

We can beat them again today, but only if you help me get out the word today.

Please urge your family and friends to vote NO on Prop 33. Forward this blog to them, or use this link to send them an email, post it on your Facebook page or tweet it before the polls close tonight!

Thanks for all your support,

Harvey Rosenfield

Founder of Consumer Watchdog

The insurance billionaire backing Proposition 33 is worried. He dropped another $500,000 into the campaign on Wednesday as Prop 33 slips in the polls (Down over 16% in the only public poll on 33.) But it’s not over – the money from Mercury Insurance chairman George Joseph means a last-minute cash infusion (he’s given $17 million total) to pay for his campaign’s lies, including new deceptive advertisements that feature testimonials by “supporters” who had financial ties to Mercury Insurance and its chairman George Joseph.


Joseph is using dirty tricks to deceive voters because the polls show the more the public learns about Prop 33 the less they like it. Two years ago, Californians voted against this insurance company’s false promises of discounts. Voters are smart enough to see through the same insurance company’s phony paid spokespeople too.

The truth can beat $17 million in insurance industry lies.

We will win if you share the facts about Prop 33 with your friends and family.

Among the latest deceptive advertising tricks featuring paid “supporters” by the Prop 33 campaign:

• A half-page ad that ran in the Los Angeles Times on Thursday features State Senator Juan Vargas stating support for Prop 33, yet fails to disclose the $69,100 in campaign contributions that Vargas has received from Joseph and Mercury Insurance. Vargas himself is a former insurance industry executive.

  See the ad here

• New Yes on Prop 33 banner ads on news websites feature the face of a voter who is actually an employee of Marketplace Communications, which has been paid over $750,000 so far to run the campaign.  Other employees of Marketplace Communications posing as real drivers were featured in paid television advertising without disclosing their identities.
• Slate mailers going to households all across California this weekend feature a Yes on 33 endorsement from the Peace Officers Research Association of California, which received at least $75,000 for the endorsement. The campaign reports paying the US Postal Service $877,0000, suggesting it may have also paid to mail out the literature for PORAC and other paid slate mailers.

The only public poll on Prop 33, from Pepperdine University and the California Business Roundtable, reported this week that Prop 33 has fallen to 48.8% support, from 54% two weeks ago, and 60% prior to that.

Proposition 33 would allow insurance companies to raise auto insurance rates on good drivers who stop driving for almost any reason, even if they didn’t have a car.

Other campaign “supporters” that have been paid directly by Mercury, Joseph and the Prop 33 campaign include:

• Roy M. Perez, the Immediate Past Chair of the California Hispanic Chamber of Commerce, owns RMP Strategies which has been paid $30,000 as a consultant by the Yes on 33 campaign. Former Senator Perata received at least $43,100 in campaign contributions from Mercury and Joseph, and was paid consulting fees from a nonprofit paid $75,000 by Mercury. The CA Hispanic Chambers of Commerce, PORAC, Senators Vargas and Perata were all featured in yesterday’s Los Angeles Times ad.
• The Greenlining Institute opposed a measure nearly identical to Prop 33 in 2010, but reversed its position after a $25,000 contribution received from Mercury this spring, which was followed by another $195,000 contribution in September. Greenlining is also featured in the Los Angeles Times ad.
• Last month, Prop 33 TV ads were caught falsely representing two women – Brandi King and Adriana Calderon – as regular drivers without disclosing that they work for the PR firm, Marketplace Communications, that has been paid over $750,000 to run the campaign.  Currently, Marketplace employee Eric Goto is featured in banner web site advertising posing as a disinterested voter voting on Prop 33.

Congressman John Garamendi, California’s first elected insurance commissioner and former Lt. Governor, today announced his opposition to Proposition 33. He joins every major consumer group in California, including Consumers Union, the nonprofit publishers of Consumer Reports, Consumer Federation of California, Consumer Action and Consumer Watchdog who oppose Proposition 33 because it would unfairly raise rates on new drivers, and Californians who stop driving for good reasons, even if they have perfect driving records.

The coalition of organizations opposing Prop 33 represents seniors, civil rights, workers, women and faith-based organizations including: California Nurses Association, California Council of Churches IMPACT, California NOW, California Labor Federation, MALDEF, Equal Justice Society, California Alliance for Retired Americans and many more.

Click here to find the extensive list of No on Prop 33coalition members.

For more information on why to vote No on Prop 33 visit: http://stopprop33.consumerwatchdogcampaign.org/

Prop 33 Is A Measure Backed by One Insurance Billionaire To Raise Rates On Good Drivers

Consumer Watchdog Campaign today compiled ten of the most compelling reasons Californians should vote NO on Proposition 33, as reported by newspapers and editorial boards across the state.

“Consumer and public interest groups are being outspent 50 to 1 by an insurance billionaire who has thrown $16 million into Prop 33 in order to cherry pick customers and raise rates on good drivers in California,” said Carmen Balber of the No on Prop 33 Campaign. “Voters should look to trusted sources to sort through the truth about how Prop 33 will hurt consumers.”

Top ten reasons Californians should vote NO on Prop 33:

1.   Prop 33 will raise rates on new drivers.

George Joseph, the insurance billionaire behind Prop 33, acknowledged to the Los Angeles Times “on Sunday that Prop 33 will raise rates on new drivers. As columnist Mike Hiltzik reported: “He made no bones about the fact that the ‘proper rate’ for customers coming to Mercury as newly insured policyholders is much higher than what he can charge them now.”

2.   Prop 33 will allow insurers to cherry pick their preferred customers and raise rates on everyone else.

Riverside Press-Enterprise editorial: “The idea that the head of an insurance company would spend millions of dollars to save drivers money defies all credibility. No, a different and self-interested agenda drives this measure: poaching lucrative customers from rivals while encouraging less desirable customers to go elsewhere. Californians have no reason to reward that kind of special-interest scheme, and voters should reject Prop. 33.”

3.   California voters said NO to an almost identical measure at the ballot two years ago.

San Jose Mercury-News editorial: “Two years ago billionaire George Joseph, chairman of Mercury Insurance, spent $16 million of the company’s money on Proposition 17, a direct attack on California’s strong insurance rights laws. Like an irritating mosquito, Joseph and his millions are back again this year with Proposition 33, essentially a new version of the law voters rejected two years ago.”

4.  Prop 33 will raise the number of uninsured drivers in California.

Riverside Press-Enterprise editorial: “That approach would make insurance more expensive for drivers who do not have it now – which would undermine the public interest. State policy should encourage all drivers to buy insurance, to avoid the extra costs everyone else pays in collisions with the uninsured. Instead, Prop. 33 would throw new financial obstacles in the path of those who lack insurance.”

5.   Prop 33 will overturn a 24-year-old consumer and civil rights protection.

North County Times editorial: “Put on the ballot by insurers, Prop. 33 seeks to lift a voter-approved prohibition (Prop. 103 in 1988) on charging automobile insurance customers a higher rate if they were not previously insured. We see no reason to change the current ban on charging higher rates to the previously uninsured. A person’s likelihood of causing a vehicle collision tomorrow would not seem to hinge on whether they had insurance last week or not.”

6.   Prop 33 will raise rates on good drivers who drop their insurance coverage for almost any reason.

Sacramento Bee editorial: “The downside remains clear as the attorney general’s office notes in the official summary: Proposition 33 ‘will allow insurance companies to increase cost of insurance to drivers who have not maintained continuous coverage.’ That would mean higher costs for graduating students buying coverage, anyone newly obtaining an auto, city dwellers who haven’t owned a car but now live in an area without mass transit, anyone who decided not to drive for more than three months to save money.”

7.   Prop 33 unfairly punishes responsible drivers who stop driving for good reasons and then need to get back on the road.

Daily News editorial: “There is no good reason such people should be punished for their non-driving period. Once they need or are able to drive again, the law says they have to buy insurance. When they comply with that law, they should not be hit with a surcharge that could last five years.”

8.   Prop 33 will raise rates on drivers with perfect driving records.

Bakersfield Californian editorial: “But Prop. 33 could still raise rates for drivers, even those with perfect driving records. In states with Prop. 33-like rules, drivers who buy insurance following a long lapse in coverage paid more: 61 percent more in Texas, 79 percent more in Nevada and 103 percent more in Florida.”

9.   Prop 33 is funded by one insurance billionaire to benefit his own company at the expense of consumers.

Daily News editorial: “The electorate didn’t buy the pitch then that Mercury Insurance’s chairman was spending $16 million to pass a measure just because he wanted consumers to save money on auto insurance. And voters shouldn’t buy it now that Mercury’s billionaire boss George Joseph is back — spending more than $8 million so far in support of of this self-serving measure.”

10. Prop 33 is backed by an insurance company with a record of abusing its customers and violating the law.

Santa Cruz Sentinel editorial: “According to the California Department of Insurance, Mercury Insurance overcharged and discriminated against California customers for 15 years. The company’s founder, Joseph, has a track record of giving money to state politicians to get state law changed to benefit Mercury, and when that failed, abusing the state initiative process with his self-serving propositions.”

Incredible! With two weeks until Election Day, the insurance billionaire behind Prop 33 finally admitted his auto insurance initiative will raise rates on new customers.

Los Angeles Times columnist Mike Hiltzik drew the admission from Mercury Insurance Chairman Joseph in Sunday’s newspaper.

When the billionaire writing the $16 million check for Prop 33 speaks about his initiative raising auto insurance rates, voters should listen.  

But will voters hear Prop 33’s financier over the deceptive television advertising he has bought claiming only that Prop 33 will “reward responsible drivers”?

You can help us get out the word by posting the link to Sunday’s LA Times column (http://lat.ms/TCDqH4) on your Facebook timeline, tweeting it or sharing it with your friends from the newspaper’s site.

In Sunday’s Los Angeles Times, Joseph acknowledged that Prop 33 is a marketing strategy for his insurance company that will allow him to cherry pick his customers “if I could charge new people the proper rate.”

As Hiltzik reports, “He made no bones about the fact that the ‘proper rate’ for customers coming to Mercury as newly insured policyholders is much higher than what he can charge them now.”

Voters banned the power of insurance companies to raise rates on first time drivers and others who did not previously have auto insurance in 1988. Prop 33 would turn back the clock on auto insurance regulation in this state.

Will you help us spread the word about Prop 33’s big lie?

Joseph said that if Prop 33 doesn’t pass it will be “a tremendous waste of money.” Better his than ours!   Please share this critical news story today.

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Posted by Jamie Court, author of The Progressive’s Guide to Raising Hell and President of Consumer Watchdog, a nonpartisan, nonprofit organization dedicated to providing an effective voice for taxpayers and consumers in an era when special interests dominate public discourse, government and politics. Visit us on Facebook and Twitter.

Sacramento Bee Ad Watch Says Prop 33 TV Ads “Mislead”

The insurance billionaire behind Prop 33 is asking California voters to believe that he wants to overturn laws that have protected consumers for 24 years to save consumers money. Consumer Watchdog Campaign today released the “Top Five Reasons You Can’t Trust Mercury Insurance,” outlining the company’s troubling history as a renegade insurance company that routinely defies the law and abuses consumers, as reasons this insurance executive and his company can’t be trusted.

Also today, a Sacramento Bee Ad Watch analysis found that a Prop 33 TV ad is “misleading,” because it hides the fact that it will raise rates on good drivers who have a break in their insurance for almost any reason, and because it “features a testimonial from a motorist without disclosing she works for Proposition 33’s campaign team.”

Read the Sacramento Bee story

Mercury Insurance chairman George Joseph has spent $16 million on Prop 33.

“The lies in the Prop 33 ads are the latest but not the last in Mercury Insurance’s long history of deceiving and abusing consumers, and willfully breaking the law to boost its own bottom line at the expense of its customers. Voters should be warned that they can’t trust a word this insurance billionaire says about Prop 33, or a single TV sound bite coming from his $16 million campaign to fool the public,” said Carmen Balber with Consumer Watchdog Campaign.

The California Department of Insurance stated in an agency enforcement action against Mercury: “Mercury has a deserved reputation for abusing its customers and intentionally violating the law with arrogance and indifference.”

Find that statement here (Page 4)

The Top Five Reasons You Can’t Trust Mercury Insurance:

1.  Discriminatory auto insurance pricing.  According to a California Department of Insurance investigation Mercury repeatedly overcharged, cancelled, refused to sell insurance or made insurance more difficult for people to buy, based on customers’ military status, occupation, health, marital status, employment status, prior accidents that were not the driver’s fault, prior insurance coverage and other illegal criteria.

Read the San Francisco Chronicle story here

2. Hiked auto insurance rates by $63 million. Mercury just raised rates on 990,000 auto insurance customers by $63 million, an average 4% rate hike that will take effect by the end of 2012, even as the company promises discounts under Prop 33.

Find the details of the rate increase here

3. Charged customers illegal broker fees.  Mercury allowed its insurance agents to charge illegal broker fees to unsuspecting customers until forced to stop by a California court. The company would advertise one price to customers, and invite them to compare it to other insurers, but not reveal that an additional, illegal broker fee would be added to the final price.

Learn more about the case here

4. Low-balling and delaying accident claims.  An internal training manual produced in a civil trial shows Mercury Insurance trained employees to mistreat, neglect and even threaten customers who file claims.

A portion of the instructional guide was disclosed as part of a 2006 lawsuit against the company by a Los Angeles business that sued Mercury for failing to properly pay a claim. Internal training guides shown to jurors instructed Mercury claims adjustors to low-ball customers, drag out their claims and remind them they could be found at fault in a trial.

Download the Daily Journal article about the lawsuit here

5. Illegally raising rates.  Mercury illegally surcharged hundreds of thousands of drivers based on their history of insurance coverage, the same surcharge Prop 33 would impose, until the Department of Insurance and the courts ordered it to stop.

When Prop 33 proponents claim a continuous coverage discount was in effect in California from 1996-2002, they are referring to these years when Mercury was breaking the law. Mercury’s own customers sued the company and the Court of Appeal put an end to the practice in 2005.

Read more about the case, Donabedian v. Mercury, here

Proposition 33 would allow insurance companies to raise rates on Californians with perfect driving records if they had a break in their insurance coverage for almost any reason, even if they weren’t driving and didn’t have a car. It targets millions of Californians for higher auto insurance rates, including students, mass transit users, the long-term unemployed and the disabled who stop driving for good reasons and then need to get back on the road.

Nearly every newspaper editorial board in the state has urged a No vote on Prop 33. Read their recommendations here

Mercury Insurance sponsored an almost identical initiative just two years ago, Prop 17, which was rejected by voters 48 – 52.

For more information on Prop 33 visit: http://stopprop33.consumerwatchdogcampaign.org/

In response to our Consumer Alert exposing the Prop 33 campaign for using paid campaign employees in their TV ads, the insurance industry-backed Proposition 33 campaign issued a statement to the LA Times Opinion blog – excerpts below – stating that “the two women in their ads were simply volunteering their stories in support of the effort to pass Proposition 33.”  That disingenuous response begs the question:

Is a Paid Employee a Volunteer? I guess if you can call charging people more for their auto insurance simply for not driving a “discount,” then why not call an employee a volunteer?

California election law requires campaigns that use paid spokespeople in their ads disclose this within the ad.  Nowhere in these ads do the proponents disclose that the two women work for the PR firm that is being paid over half a million dollars to run the Yes on 33 campaign.  That is why we filed an official complaint with the California Fair Political Practices Commission asking them to investigate the ads for violating election law.

If you feel that the public has a right to know when the people in campaign ads are being paid for their opinions, then watch our Consumer Alert and share with your friends and networks to help us combat these insurance-industry lies.

Excepts from the:

October 3, 2012

“Marketplace argues that it didn’t violate the law, and that may be technically correct. But the campaign misleads the public by presenting employees of its political consultant as disinterested consumers who just want a break on their insurance premiums…That seems par for the course for backers of Proposition 33, the latest in a long series of efforts by Mercury Insurance founder George Joseph to undo part of 1988’s Proposition 103.”

“In its response Tuesday, Marketplace said: ‘We encourage Consumer Watchdog to continue drawing attention to the ads because the message they deliver is both honest and direct.'”

“…The message is direct, all right, but it isn’t honest.”

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Posted by Daniel Palay, New Media Director of Consumer Watchdog Campaign and supporter of StopProp33.com.  For more information on the campaign visit us on Facebook and Twitter

You won’t believe this!

The insurance billionaire behind Prop 33 isn’t just lying about his phony proposal in the television ads airing this week. He is actually using paid employees to impersonate “real drivers” and not disclosing it to voters. We have the proof in this short video.

Please watch the short video exposing the Prop 33 campaign’s big lies and share it with all the California voters you know to warn them.

Campaign finance law requires that campaigns disclose if they are using paid spokespeople in their television ads, but the insurer-funded Prop 33 campaign didn’t disclose to viewers that it used two employees of its paid PR firm in advertisements to pose as average drivers.

You can help spread the word. Watch the short video and post it to your Facebook, Twitter and other accounts.

California voters shouldn’t be deceived by one insurance billionaire, Mercury Insurance’s George Joseph, who has spent $8.4 million to pass Prop 33.  Our friends, family and co-workers deserve to know the truth.

When was the last time an insurance billionaire spent $8.4 million on a ballot measure to save consumers money?

Please join us in warning California voters.

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Posted by Jamie Court, President of Consumer Watchdog Campaign and leader of StopProp33.com.  For more information about the campaign visit us on Facebook and on Twitter.

The Consumer Federation of America released a new report earlier this week assessing consumer views on the factors insurance companies use to set premiums around the country.  Not surprisingly, Americans think that insurance rates should be based primarily on motorists’ driving safety record (87% and 85% of respondents believe rates should reflect a driver’s number of accidents and tickets, respectively).

More than a majority of Americans think it’s unfair to consider the ZIP-code in which you live or your occupation.  More than two-thirds (68%) call it unfair to charge drivers more if they did not have insurance because they did not previously have a car.  This data point should interest Californians, because there’s an initiative on the November ballot  – Proposition 33 – that would allow insurance companies to penalize people based on this precise factor that 68% of Americans consider unfair.

Proposition 33 was put on the ballot by Mercury Insurance’s billionaire Chairman, and his $8 million campaign conveniently ignores the fact that the initiative allows insurance companies to raise prices on drivers who didn’t previously have insurance because they didn’t have a car. No doubt, his pollsters are telling him the same thing that the national survey reports: Americans don’t think his scheme is fair.  (So if people think your initiative is unfair, your only option is to run a deceptive ad campaign filled with disingenuous patriotism and hope people can’t see the trick you’ve hidden behind that flag.)

But back to today’s report for a moment. Another interesting thing Consumer Federation did was look at rates around the country and show the effect of a variety of rating factors, including prior insurance coverage.  Two things stand out:

1. Where most companies in most states dramatically jack up the rates on customers who do not have prior insurance when they want to buy a policy, Californians’ premiums are unaffected by that factor because it is illegal to apply it in California.  The whole point of Prop 33 is to make California more like these other states in a bad way.
2. Generally speaking, rates in Los Angeles, California are both lower than the other big cities tested and more stable after testing for factors considered unfair, such as ZIP Code, occupation, prior insurance and credit scoring.  In other words, the insurance reforms Californians installed through Proposition 103 in 1988 not only apply standards of fairness to the marketplace, they have created a competitive and lower priced market as well.

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Posted by Doug Heller, Executive Director of Consumer Watchdog, a nonpartisan, nonprofit organization dedicated to providing an effective voice for taxpayers and consumers in an era when special interests dominate public discourse, government and politics. Visit us on Facebook and Twitter.

Consumer Advocates Call On Group To Withdraw Support For Measure That Would Raise Car Insurance Rates on Good Drivers

The nonprofit Greenlining Institute acknowledged in a San Francisco Bay Guardian story published today that it received a $25,000 donation from Mercury insurance company, and expects more for its work in support of Mercury-backed Proposition 33. Prop 33 is funded by Mercury insurance’s billionaire chairman George Joseph and would raise car insurance rates on good drivers who have a break in insurance coverage, even if they’re not driving.

In a letter, Consumer Watchdog urged Greenlining to reverse its decision to support Proposition 33. Greenlining opposed a nearly identical ballot measure proposed by Mercury insurance company in 2010, Prop 17.

Download the letter here

Read the San Francisco Bay Guardian story

“We are writing to urge you to reconsider your shocking support for Proposition 33 and the auto insurance redlining it seeks to legalize,” wrote Consumer Watchdog founder Harvey Rosenfield and Washington DC director Carmen Balber. “Greenlining purports to represent the very low-income drivers who will be hurt the most if Proposition 33 is approved next November, allowing insurance companies to surcharge Californians who stop driving for legitimate reasons and then choose to get back on the road.”

Prop 33 would overturn a 24-year-old law banning discriminatory practices by auto insurance companies that were brought to light in the 1987 California civil rights case, King v. Meese.

“The rampant practice of surcharging, or refusing to sell insurance to, people who were not previously insured was one of the most pernicious of the discriminatory techniques employed by the insurance industry,” said the letter. “In signing the ballot argument for Proposition 33, you have aligned yourself with George Joseph and Mercury Insurance, the most persistent partisans for the legalization of the old redlining tricks that made auto insurance inaccessible to low-income families and communities of color for decades.”

The letter notes that Proposition 33 targets Californians who stop driving for legitimate reasons:

• When low-wage workers who commute by bus need to get a car in order to maintain their job, they will be surcharged by about 40% for auto insurance;
• When immigrant drivers are finally able to obtain a California driver’s license and try to buy insurance, they will be forced to pay hundreds and possibly thousand of dollars more than the drivers who purchased insurance in the past, even though they are equally good drivers;
• When drivers who have found it financially impossible to maintain uninterrupted insurance coverage turn to the auto insurance market in hopes of complying with the mandatory insurance law, they will face a financial penalty for being poor;
• Those who cannot afford these massive surcharges will be exposed to penalties and seizure of their vehicles for failure to comply with the Financial Responsibility Law.