CA initiative: Prop. 17

I have never been a fan of the initiative process. It is too easy to create a 30 second commercial that is simply misleading.

For example, take a look at Proposition 17, which is on the June 8, 2010 CA ballot. Insurance companies, the main sponsor of the initiative, are promoting the Proposition by saying that “Under current law, drivers who have maintained auto insurance with the same insurance company are eligible for a continuous coverage discount. However, a flaw in law prohibits drivers from taking this continuous coverage discount with them if they switch insurers.” This quote is from the "Yes on 17" web site.

So what is the discount at issue. It sounds like nothing more than a discount anyone gets by being a good customer of one company. I get rewards from Office Depot and Staples. However, I cannot take my Staples rewards and apply them to Office Depot or vice versa. So I wondered why an insurance carrier would promote this idea.

What insurance carriers are not telling consumers is that the California Department of Insurance and the Attorney General have concluded that Prop 17 will allow insurance companies to raise premiums on drivers who, for virtually any reason, did not have insurance coverage for 90 days at some point in the past five years. It turns out that Mercury Insurance is Proposition 17's primary sponsor. They paid a petition drive management company over $2 million to collect signatures to qualify the measure for the ballot.

So rather than save money, this is really just another way for an insurance carrier to charge a consumer more for the same product.