Editorial, THE SAN GABRIEL VALLEY TRIBUNE
Frankly, there’s little credibility in a major insurance company spending beaucoup bucks on a ballot measure just so it can offer motorists a discount.
Come on. We weren’t born yesterday. Were you?
But that is what Mercury Insurance wants you to swallow. The insurance giant says it is spending millions on Proposition 17 so it can offer hard-working California motorists a “continuous coverage discount” if you switch insurance carriers to Mercury, something they can’t offer now except to their own clients. Their commercials – increasingly aggressive – now say their ballot measure will reduce your car insurance premiums by hundreds of dollars.
Right. And we have some ocean-front property in Irwindale to sell you.
Consumer groups and others have tested these claims by doing what you should always do when shopping for insurance, a new car, or these days, when going to the voting booth. They did their homework. They asked a knowledgable third party, the California Department of Insurance.
Guess what? The CDI anlaysis says no, this goes against the ratemaking principles established in state law of “zero-sum.” The CDI concluded: “If an insurer offers a continuous coverage discount for some drivers it will result in a surcharge for other drivers. This is because automobile insurance discounts and surcharges must offset one another so that each rating factor applied by an insurer is evenly balanced within the insurer’s rating plan.”
In short, there will be winners and losers if Prop. 17 passes. Some will save money but many more will pay more for car insurance. After all, Mercury isn’t spending millions on its own hand-written ballot measure to lose money.
The beauty of this clever deception is no one can be sure who wins and who loses, not even the Department of Insurance, because Mercury and other insurance companies can simply submit a new rate plan the day after the June 8 election.
What others say, such as Consumer Watchdog, if Prop. 17 is approved is that automobile insurance companies will then be able to tack on surcharges to these folks:
Senior citizens who’ve stopped driving for whatever reasons – surgery, hospitalization – and then restarted their insurance.
Members of the armed forces stationed in the United States when they return and restart their insurance. That’s right, Prop. 17 penalizes those in the military serving stateside.
Anyone who misses a payment and has their insurance canceled and now wants to restart it.
Someone who lost a job and stopped driving, then started driving again after finding a job. Or anyone taking public transit who returned to driving and needed car insurance again.
These are just some of the surcharge opportunities made possible by Prop. 17, which throws out the rules of the true voter-approved insurance reform measure, 1988’s Prop. 103, and inserts caveats that will nickel and dime future policy holders. Worst of all, it hurts those who have gone without insurance by adding the “lapse surcharge” when they sign up. Think about it. For those who abide by the law and buy car insurance, it is in their best interest to encourage those driving without it to get insurance. By adding surcharges to new startups, Prop. 17 discourages drivers from buying first-time insurance and increases the chances of being hit by an uninsured driver.
We can’t trust Mercury Insurance or any big, special interest that goes out and buys a ballot proposition. Call us extra cautious, but we don’t want to see yet another ballot measure get approved that doesn’t do what proponents say it will. On June 8, vote “no” on Prop. 17.
Tags: big corporations, deceptive, Editorial, Mercury, NewsStory, Prop 17, trust, voters
