California’s Auto Insurance Proposition Making Noise as June Approaches
Posted in Auto Insurance
March 10th, 2010
California residents may be soon rejoicing or biting their nails as a new auto insurance initiative on the June ballot waits to be voted on. If the initiative passes, residents could see significant adjustments in their auto insurance quotes, for better or for worse.
About the Auto Insurance Initiative
The new insurance initiative is something that has been pushed for several months by auto insurer Mercury Insurance. The initiative, also known as Prop 17, is called the Continuous Coverage Auto Insurance Discount Act.
However, while the initiative has been pushed as a benefit to consumers to gain support for June, the Campaign for Consumer Rights, a campaign affiliate of Consumer Watchdog, has been fighting against it because it could result in rate increases for individuals who allow for a gap in coverage.
The Pros and Cons of the Initiative
To better understand the Prop 17, let’s look at the pros that Mercury Insurance proposes and the cons revealed by the Campaign for Consumer Rights.
- Individuals who maintain their coverage continuously will be rewarded with a discount on future auto insurance quotes.
- Coverage will still be considered continuous even if the policyholder decides to go with a new auto insurer.
- More drivers may be willing to keep their insurance if they know they will receive a discount.
Cons of Prop 17
- Individuals who do not maintain continuous coverage will suffer a severe rate increase when they do decide to reapply for coverage.
- The initiative could punish those who rightfully suspend their own coverage including military officials, individuals in and out of the hospital, senior citizens or those who opt for public transportation temporarily.
- Coverage must be maintained continuously over a five-year period to avoid being penalized.
Despite the Campaign for Consumer Rights’ attempts to prevent the initiative from reaching the ballot, it did. Now it will be up to June voters to determine the fate of car insurance rates for drivers in California.
How will you vote?
[...] on how drivers are charged for their coverage. The initiative is known as Prop 17 and has been making a lot of noise in recent months due to the continuous auto insurance discount.Some say that the new proposition [...]