California Lawmakers Give Continuous Coverage Auto Insurance Proposal Another Shot

A controversial California auto insurance proposal has been reintroduced and may be placed before voters on the ballot next year. Known as the “continuous coverage” measure, it was debated heavily in 2010 for what some opponents said was unfair treatment of those who find they cannot maintain continuous coverage.

Renewed Debate over Continuous Coverage Measure

Last year, the Continuous Coverage Auto Insurance Discount Act, also known as Proposition 17, made a lot of noise in California. Supporters felt the act was beneficial because it rewarded individuals who had maintained continuous coverage by offering them a discount while opponents felt it punished those who could not maintain coverage.

Existing California law allows insurance companies to provide drivers with auto insurance discounts if they are renewing or buying new policies as long as they are already insured, but that coverage must be issued by the same company or an affiliate.

The continuous coverage act would differ in that it would allow customers to move from one company to another and still receive the discount.

Opponents of last year’s act felt it served as a punishment to individuals who had not owned cars, canceled coverage due to military obligations, were disabled or were simply unable to drive due to age. This is due to the fact that it charged a major penalty fee for those who did not maintain coverage.

New Proposal Includes Short Lapses in Coverage

While Prop 17 was unsuccessful in being passed by voters on the June 20 ballot, lawmakers are set to push the initiative again with some changes intact.

The biggest adjustment is that the definition of “continuous coverage” has been expanded to include individuals who only have short lapses or those who have had lapses due to unemployment, injury or military service.

While the new proposal works to cover those who have been previously insured, opponents say it still punishes individuals who have never carried their own coverage, as well as low-income families who could not afford a car or coverage for extended periods of time.

Despite criticism, lawmakers plan to push forward with the initiative. Last week, the California attorney general issued a title and summary for the proposed initiative. This clears the way for backers to begin the signature-gathering process and move it toward the ballot next year.