Ignoring a deceptive $16 million campaign by Mercury Insurance Company, California voters rejected a ballot measure that would have amended 1988 insurance reform Proposition 103 to allow insurance companies to impose surcharges on motorists who were not previously insured or had a break in coverage for virtually any reason. A majority of Californians voting against Proposition 17, despite ads promising $250 premium reductions.
“Once again, David defeated Goliath,” said Harvey Rosenfield, author of Proposition 103, which mandated stringent rate regulation and was passed by voters in 1988 despite an $80 million campaign against it by the insurance industry.
“Californians asked themselves when was the last time an insurance company spent $16 million to save consumers money, and the answer was clear: never. California voters refused to be duped by corporations using the people’s initiative process to enrich themselves at the expense of consumers.” Proposition 17 would have legalized surcharges banned by Proposition 103.
Campaign for Consumer Rights, which led the campaign against Mercury, was outspent approximately 12 to 1. Campaign for Consumer Rights is the campaign affiliate of the nonpartisan, nonprofit organization Consumer Watchdog.
Consumer advocates hailed the defeat of the Mercury Insurance initiative as proof that California voters do not intend to allow insurance companies or other big corporations to subvert the initiative process. The campaign in support of Prop 17, which was run by the corporate political consulting and advertising firm of Goddard Claussen, lost despite spending about $15 million more than the Stop Prop 17 campaign.