They Don’t Quit
by digby
Here’s a story about insurance companies. It’s about auto insurance in California, a state which has for 20 years mandated insurance but regulated the companies to keep the premiums down. The regulations have been under continuous attack from the insurance companies. This is the latest:
Mercury Insurance’s Deceptive Initiative: An Attack on Consumers, Working Families and the Newly Unemployed
The deceptively titled “Continuous Coverage Auto Insurance Discount Act” would impose massive premium surcharges on Californians who were previously uninsured. The purpose of the initiative is to gut Proposition 103’s anti-discrimination provision that states: “The absence of prior automobile insurance coverage, in and of itself, shall not be a criterion… for automobile rates, premiums, or insurability.”
Under this Mercury Insurance-sponsored proposal, people who stop driving and cancel their auto insurance – after being laid off, for example – will face a steep penalty when they need to restart their insurance for a new job.
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Drivers cancel coverage for many reasons: a layoff may cause someone to stop driving in order to cut back on gas and insurance costs, or a family may miss an installment payment during the upheaval of a foreclosure. Senior citizens who stop driving for a time to recover from major surgery may cancel auto insurance to save money while they cannot use their car. Students, stay-at home spouses or others may simply choose not to drive a motor vehicle for a time. All of these people will pay a penalty under this initiative, even if they have an excellent driving record. With unemployment in California at a devastating 12%, people who are forced by their economic circumstances to drop insurance now would now be penalized for restarting their auto insurance coverage as they try to get back on their feet.
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The political consultants running Joseph’s latest anti-consumer campaign know that concerned Californians won’t stand for an initiative that imposes an insurance surcharge, so they conveniently fail to disclose this fact. That is why the Mercury initiative does not disclose that its language guts a key Proposition 103 protection against the practice of using prior insurance status in the setting of rates and premiums.
Mercury claims that its initiative will put California in line with other states. Is that a good thing?
In 1988, Californians voted for the most sweeping insurance consumer protections in the nation by passing Proposition 103. Since then, California drivers have saved more than $62 billion on auto insurance alone, according to a 2008 study by the Consumer Federation of America. Our rules remain far stronger and more protective than any state in the nation. The Mercury Insurance proposal would send us back to the old discriminatory practice (still allowed in too many states where insurance companies have blocked reforms) of arbitrarily surcharging the most financially vulnerable citizens.
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This proposed initiative is sponsored by Mercury Insurance, which has long sought to end Prop. 103’s protections against insurance discrimination and excessive prices. In the past, Mercury has sponsored legislation to restore “territorial rating,” in which insurance companies base auto premiums primarily upon a motorist’s zip code, a practice outlawed by Proposition 103.
In 2003, Mercury distributed millions of dollars in campaign contributions to elected officials in Sacramento in order to pass legislation (SB 841) that legalized surcharges for those who experienced a lapse in coverage. A California Court of Appeal struck down the law out… This initiative is an attempt to get around that ruling.
They have the money and they will spend it to pass a disingenuous ballot initiative that will improve their bottom line and get around the intention of the original reforms. And consumer groups will have to fight tooth and nail to stop it. And you can just imagine how they will do it in Washington, behind closed doors, at fund raising dinners and out on the links. They don’t give up.
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