NEWS RELEASE
Contact: Naomi Seligman, 310-392-0522, ext. 318; or Harvey Rosenfield, ext. 303
3rd Largest Auto Insurer Doesn’t Plan On Telling Customers They Could Face Price Hikes
Santa Monica, CA –A letter Mercury Insurance Company apparently intends to send to its policyholders this week urging them to support Proposition 17 fails to disclose that its customers could be forced to pay enormous surcharges if the initiative passes. It also contains other false and misleading statements, consumer advocates said today.
Mercury’s letter, a copy of which was obtained by Consumer Watchdog, comes just a day after the company began a long-expected onslaught of TV ads that immediately drew criticism from experts and consumer advocates for misleading voters. The letter can be downloaded at http://www.consumerwatchdog.org/resources/MercuryLetter2Policyholders.pdf
“This is yet another reason why Californians cannot trust Mercury Insurance or Proposition 17,” said insurance reformer Harvey Rosenfield. “To protect yourself and your family from the impact of this deceitful and dangerous initiative, you must vote no on 17.”
Mercury has consistently misled the public concerning Proposition 17. The company has denied that Proposition 17 will allow it and other insurance companies to raise rates and sued both the Attorney General and consumer advocates to try to prevent that information from appearing in the voter guide. Mercury lost that battle, and the AG’s analysis states that Prop 17 “will allow insurance companies to increase cost of insurance to drivers who do not have a history of continuous insurance coverage.”
The Mercury letter obtained by Consumer Watchdog makes the following false and misleading statements:
Mercury Statement: “From 1995-2005, a continuous coverage discount was available to all California drivers who maintained continuous insurance coverage with any insurer. During this time Mercury provided up to a 25% discount to all customers who maintained continuous insurance coverage.”
Fact: Setting premiums based on whether a motorist has been previously insured has been illegal since voters passed a ban on the practice in 1988. However, beginning in the 1990s, Mercury intentionally violated that law, surcharging people 40% or more, until it was forced to stop by the courts and the insurance commissioner. Prop 17 would legalize these surcharges.
Mercury Statement: “Proposition 17 ends the penalty for changing insurers.”
Fact: There is no penalty for changing insurers.
Mercury Statement: Current law “punishes responsible drivers by prohibiting them was taking their continuous coverage discount with them if they switch insurance companies…They should be able to take their continuous coverage discount” when they “change insurers.”
Fact: There is a discount for customers who remain with the same company for a period of years, but Prop 17 does not address that discount. Moreover, contrary to Mercury’s statement, if 17 passes, and you switch companies, the new company will not honor your loyalty discount with your previous company.
Mercury Statement: “This is no different than…the law allowing cell phone customers to keep their phone numbers when changing telephone companies.”
Fact: Cell phone companies cannot penalize you if you never owned a cell phone before, or stopped using one. Prop 17 allows insurance companies to penalize you if you never owned a car before, or never drove – even if you are a good driver.
Mercury Statement: “Proposition 17 encourages drivers to stay insured – meaning fewer uninsured motorists.”
Fact: Prop 17 will legalize surcharges that will lead to more uninsured motorists on the road, according to the California Department of Insurance.
Mercury Statement: Prop 17 “protects our military…if they cancel insurance while overseas.”
Fact: Mercury fails to reveal that under Proposition 17, military serving stateside get surcharged if their coverage lapses for more than ninety days.
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Tags: big corporations, deceptive, Mercury, News Release, overcharges, scandal, trust, voters
