Tag Archives: No on Prop 33

New survey: Americans don’t want insurance rates tied to prior insurance coverage

Doug Heller

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 Group Calls On Insurance Billionaire To Withdraw Deceptive Prop 33 Advertisements

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Consumer advocates today called on the insurance company executive behind Proposition 33 to immediately withdraw new radio advertisements that mischaracterize the impact of the initiative on foreign service and military personnel in the wake of attacks on US embassies abroad.

In statewide radio advertisements paid for by Mercury insurance executive George Joseph, the Proposition 33 campaign erroneously claims soldiers will be able to keep auto insurance discounts they now lose, and that Prop 33 is about “supporting our heroes.” In fact, foreign service officers would be surcharged under the proposal for not driving while working oversees when they restart their auto insurance in California. Moreover, Prop 33 will not protect any current discount for soldiers.

In a letter sent to Mercury Chairman Joseph today, Consumer Watchdog wrote: “Out of respect for military officers and foreign service employees, who face life-threatening circumstances at our embassies abroad, we call upon you to immediately withdraw your deceptive and disrespectful radio advertising campaign in favor of Proposition 33.”

Download Consumer Watchdog’s letter here, or read text below

Listen to the Prop 33 radio ad here

A Los Angeles Times opinion staff blog published yesterday took the campaign to task for the deceptive ad: “The 30-second spot declares: ‘Proposition 33 protects our veterans and military families, and allows them to keep their discount on car insurance, saving them money.’ It would do nothing of the kind.”

Read the Times blog here:

Consumer Watchdog’s letter continued: “Your radio advertisement claims Prop 33 is about “supporting our heroes.” But under Prop 33, good drivers who have stopped driving for legitimate reasons – like serving abroad in our foreign service – would be hit with large surcharges if they decided to drive again and buy insurance in California. For political reasons, you exempted from Prop 33’s large rate increases a small segment of those who stop driving for legitimate reasons, active duty military officers. That certainly does not mean you are helping soldiers keep a discount. Moreover, foreign service officers, families of military officers, disabled veterans and others who stop driving for good reason, but cannot prove active duty military service is the reason for their coverage lapse, would get slammed under Prop 33 with big rate hikes.”

This month, Joseph also gave $195,000 to a nonprofit organization for its support of Proposition 33 in another attempt to mislead voters about the impact of Prop 33 and camouflage its insurance industry backing. Joseph gave 99%, $8.4 million, of the funds in support of Prop 33.

The measure would overturn a 24-year-old law banning discriminatory practices by auto insurance companies that were brought to light in a 1987 California civil rights case, King v. Meese. Proposition 103, passed by the voters in 1988, banned auto insurers from charging more, or refusing to sell insurance, to people who were not previously insured.

Read more about Proposition 33 at www.StopProp33.org

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September 13, 2012

Mr. Joseph,

Out of respect for military officers and foreign service employees, who face life-threatening circumstances at our embassies abroad, we call upon you to immediately withdraw your deceptive and disrespectful radio advertising campaign in favor of Proposition 33.

You began your disingenuous “Heroes” radio advertising campaign for Proposition 33, the California ballot measure for which you have given 99% of the funding, the day after September 11th with the hope of fanning patriotic sentiments for your insurance company’s cause.   You could not have known that those cynical advertisements – which misrepresent your measure’s impact on our nation’s military, their families and foreign service officers – would air when American military and foreign service members are under grave threat worldwide.

Nonetheless, you now have an obligation not to betray the seriousness of the current circumstances our heroes face abroad with radio advertisements that lie about what Prop 33 does in their name.

As the Los Angeles Times editorial staff blog noted Wednesday:

“Proposition 33, an initiative to let auto insurers offer discounts to competitors’ customers, isn’t quite the same as Proposition 17, a similar proposal that voters rejected in 2010. But the campaign in favor of the measure seems to be following the same truth-distorting playbook.

“The Yes on Proposition 33 campaign has bought airtime on 19 radio stations in five cities for what appears to be its first commercial, which is due to begin broadcasting Wednesday. The 30-second spot declares: ‘Proposition 33 protects our veterans and military families, and allows them to keep their discount on car insurance, saving them money.’

“It would do nothing of the kind.”

As you well know, Prop 33 has nothing to do with military officers keeping any discount under current law. All your initiative does is legalize a now-illegal rating factor: Whether a driver has had auto insurance continuously or not.

Your radio advertisement claims Prop 33 is about “supporting our heroes.” But under Prop 33, good drivers who have stopped driving for legitimate reasons – like serving abroad in our foreign service – would be hit with large surcharges if they decided to drive again and buy insurance in California. For political reasons, you exempted from Prop 33’s large rate increases a small segment of those who stop driving for legitimate reasons, active duty military officers. That certainly does not mean you are helping soldiers keep a discount. Moreover, foreign service officers, families of military officers, disabled veterans and others who stop driving for good reason, but cannot prove active duty military service is the reason for their coverage lapse, would get slammed under Prop 33 with big rate hikes.

Mr. Joseph, you have repeatedly cited your experience as a veteran to justify why one insurance company billionaire should be allowed to change the insurance laws through Proposition 33.   We urge you to take a moment of silence to think like a veteran now and withdraw these advertisements.

Sincerely,

Jamie Court

Mercury Insurance Gave $25K to Greenlining Institute for Flip-Flop Prop 33 Endorsement

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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.