Controversial Auto Insurance Initiative Set for June Ballot

In December, we reported on the proposal of a controversial auto insurance initiative that could penalize drivers who allowed their insurance coverage to lapse; however, despite strong opposition,the proposalwill reachCalifornia’s June ballot. The initiative, also known as the Continuous Coverage Auto Insurance Discount, has some definite pros and cons, benefiting those who remain insured while penalizing those who allow their coverage to lapse.

Pros and Consof the Initiative

As a California driver, if you never let your coverage lapse, some of your benefits would include:

  • Discounts in your insurance premiums
  • Lower rates offered among insurers to remain competitive
  • You could change insurers and still take advantage of the discount

While these benefits sound nice, there is a problem. Those who are unable for any reason to maintain their insurance would suffer a surcharge that could result in having to pay hundreds of dollars extra to restore their insurance. What’s worse, the lapse could have been anytime in the past five years. So if you are a soldier, senior citizen, or even someone who had a long-term hospital stay and allowed your coverage to lapse, you could be on the hook for the penalty.

Continuous Opposition to the Initiative

The initiative for continuous coverage has received continuous opposition from the nonprofit organization, Campaign for Consumer Rights, which is a campaign affiliate of Consumer Watchdog. It notes that in addition to seniors, injured and soldiers being penalized, those who simply want to take public transportation to work would suffer as well.

But since the proposal was able to make the ballot with ease (California Secretary of State Debra Bowenapprovedit after receiving nearly 300,000morevalid signaturesthan required), it will now be up to voters to determine the fate of this initiative.

What do you think of the initiative?