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No on Prop 17

May 21st, 2010 · No Comments · Commentary

The California Department of Insurance recently cracked down on an insurance company that has been overcharging motorists, including men and women serving in the military, for 15 years. That same company, Los Angeles-based Mercury Insurance, is bankrolling Proposition 17 on the June ballot. Mercury wants you to trust it when it says that its measure will save everyone money.
When was the last time an insurance company spent $7 million on a ballot initiative to lower your rates?
In fact, Mercury’s Proposition 17 gives insurance companies the power to raise rates on millions of responsible Californians. Which is why you should vote no.
This deceptively written initiative allows insurance companies to surcharge people who have not been previously insured– even if they are perfect drivers but weren’t insured because they weren’t driving or didn’t own a car. Proposition 17 also penalizes anyone who had to drop coverage for more than 90 days over the last five years or missed a single insurance payment.
These surcharges are illegal in California today– the voters banned them in 1988 because the higher rates led to more uninsured motorists on the road. In states that have laws similar to Proposition 17, the surcharges can raise the price of car insurance by 200 percent or more, adding thousands of dollars to the annual cost of insurance.
We must stop Prop 17 because if it passes, it will allow insurance companies to punish law-abiding citizens who have done nothing wrong– seniors who stopped driving for a period of time while recovering from surgery, for example. Ditto for college students who don’t need a car until the summer.
Proposition 17 would even punish Californians who serve in the military stateside and must interrupt their coverage while in boot camp. Jon Soltz, the chair of VoteVets.org, strongly opposes Prop 17 as does USAA, the national auto insurance company formed to insure members of the military. USAA says it cannot support Prop 17 because it will penalize active-duty service members defending our country.
We’ll all pay more than we should under 17, because when insurance companies boost rates, more drivers will go uninsured. When they get into accidents, premiums go up for everyone else.
Californians are rightly suspicious when big corporations try to manipulate the initiative process for their own self-interest. In the case of Proposition 17, its sponsor, Mercury Insurance, has proved it cannot be trusted.
Arguments about Prop 17 made by Mercury and its paid spokespeople have been repeatedly reviewed and rejected as false by the courts and state regulators.
And just last month, the Insurance Commissioner brought an administrative lawsuit against Mercury alleging that it engaged in more than 50 practices that are illegal under California law, victimizing thousands of Californians. Investigators discovered that Mercury failed to give customers the discounts they were entitled to and overcharged people just because they are self-employed, work out of their homes, or had health problems. The company even broke its own previous pledges to regulators that it would stop violating California laws. The company faces tens of millions of dollars in fines.
Mercury Insurance’s sponsorship of Proposition 17 is like Bernie Madoff backing a ballot proposition claiming to protect investors.
The last thing California families can afford right now is an initiative that makes insurance companies less accountable for their actions, leads to more uninsured motorists and skyrocketing auto insurance premiums. That’s why veterans groups, seniors and Consumers Union, the nonprofit publisher of Consumer Reports magazine, all agree– Vote no on Proposition 17.

Harvey Rosenfield is the founder of Consumer Watchdog– a California-based, nonprofit consumer education and advocacy organization– and author of 1988 insurance reform Proposition 103.

More Information
stopprop17.org

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