Editorial, THE REPORTER (VACAVILLE, CA)
At best, Proposition 17 on the June 8 ballot is a solution in search of a problem. At worst, it’s a deceptive gimmick designed to pluck dollars out of consumers’ wallets.
Either way, the measure dealing with the kinds of discounts auto insurance companies are allowed to offer deserves to be rejected.
The Mercury Insurance Co. is behind the measure, spending some $10 million to qualify and support it. It says Proposition 17 is a simple change in the law that would allow insurers to offer a “continuous coverage” discount on policies to new customers who switch insurance companies.
Customers generally would be eligible for the discounts if their coverage had not lapsed for more than 90 days in the past five years. If the lapse occurred because of military service abroad, the discount would still be available.
But, as consumer watchdog groups point out, that is hardly the whole story. Insurers also would be allowed to increase the cost of insurance to drivers who dropped their car insurance for 91 days or more in the past half decade. Surcharges of several hundred dollars or more would be allowed even for motorists with good driving records.
Many Californians have lapses in their auto insurance when they serve in the military stateside, go to college, suffer illnesses, lose their jobs or live in a large city with good public transportation.
The threat of paying surcharges appears, in part, to be designed to force some people to pay for auto insurance during periods when they do not need it.
Proposition 17 does not stipulate the size of surcharges or discounts. But it doesn’t take a financial wizard to conclude that insurance companies are likely to take in far more money in surcharges than they dole out in discounts. Why else would Mercury spend millions of its own dollars on the measure?
Voters should be aware that drivers in states that do allow surcharges such as the ones Mercury seeks often pay much higher premiums. California already has a large number of uninsured drivers, many of whom cite affordability as the problem. Let’s not potentially add to that number.
Besides, one should wonder why, if this were such as great idea for drivers, more consumer groups wouldn’t be clamoring for it.
Proposition 17 appears to be another measure initiated and financed by a single company for its own benefit at the expense of the public interest. Voters should soundly reject it.
Tags: big corporations, consumer, contributions, deceptive, Editorial, Mercury, Prop 17, voters
