Mercury Insurance Continuous Auto Insurance Discount Support

A controversial California auto insurance initiative has made its way back to the November ballot in California after facing opposition. The initiative, if passed, would provide an auto insurance discount to individuals who maintained continuous auto coverage while penalizing drivers who allowed their insurance to lapse.

California Auto Insurance Discount Resurfaces

A California auto insurance initiative, known for offering what is considered as lopsided benefits to some drivers, has been the center of attention in the state for several years. In 2010, the initiative known as the Continuous Coverage Auto Insurance Discount Act, or Prop 17, made it to the state ballot.

Facing strong opposition from activist groups like Consumer Watchdog, many voters were encouraged to vote down the bill that would provide discounts to drivers who never allowed their coverage to lapse, but would financially penalize most drivers who dropped their coverage, even if the lapse was due to extenuating circumstances.

The legislation was indeed voted down in 2010, but again resurfaced in 2011 as a consideration for this year’s ballot. Reports now show that the measure will be placed on the ballot, leaving voters to decide its fate again.

Mercury Insurance Receives Backlash for Continued Support

Mercury Insurance, an insurance company that has come under fire numerous times for suspicious activity like multi-million dollar rate hikes, is backing the measure as it did in 2010. In fact, reports show that a company chairman has bankrolled the initiative by more than 99 percent.

George Joseph, the octogenarian founder of Mercury, has attempted over the years to push for the discount, allowing the company to spend $16 million to back the initiative. According to the California secretary of state’s office, Joseph has personally contributed $8.2 million to the new campaign, which supporters say will allow consumers to receive the discount even if they switch insurance companies.

Critics of the measure say the initiative is unconstitutional and violates the 1978 insurance reform initiative, Proposition 103. The proposition requires that California auto insurance premiums primarily be based on a driver’s safety record, the number of miles driven per year and a driver’s years of experience.

By forcing higher premiums on individuals who have never owned a car, or have allowed their coverage to lapse because they sold their car, opponents argue the bill violates consumers’ constitutional rights.