Update: Originally written in September 2009, but sadly people were bamboozled into signing the petition which now becomes Proposition 17 on the June ballot.
Leading insurance provider Mercury Insurance wants to revise Proposition 103 which was passed in 1988. Proposition 103 was the initiative that reformed the insurance industry in California from home, auto and business insurance as examples.
1987 was the year when the state of California mandated its motorists to carry automobile insurance, but the insurance industry charged heavy premiums or denied coverage to those who previously did not have auto insurance and or had a short lapse in their coverage. Because of the behavior of the insurance industry, a California Supreme Court Case (King v. Meese) the court understood that the previous no-prior coverage penalty was discriminatory, but the solution was found through legislation not adjudication that brought us Proposition 103 which brought consumer protections to protect against abuses from the insurance industry in 1988.
Thanks to Proposition 103 we have stable auto insurance rates in the last twenty years; lack of prior coverage is no longer a factor in the calculation of a customer’s premium, rates are set on your driving history not where you live, good drivers discount, the prohibition of red-lining good drivers to high risk and high rate policies, brought anti-trust regulation to the insurance industry and much more.
Unfortunately Mercury Insurance is thirsty for more profits and wants to put a ballot measure on the ballot because they want to abuse the consumer in the name of the mighty dollar. Mercury Insurance has placed a ballot measure in circulation to allow them to raise rates for drivers not at fault in an auto accident. If you miss one single auto insurance payment, Mercury Insurance wants to jack up your rates. If you had to stop your insurance policy because you could not afford the premiums, Mercury wants to charge a fee to restart your policy, but that would only lead to more uninsured motorists and higher uninsured motorist coverage for the rest of us. If you even have the audacity to file a claim on your policy, they also want to raise your rates too. And if you have a car accident you would not be likely to file a claim which would be a public safety hazard in the long run. If less people file claims for auto accidents that means more profit for the insurance industry and Mercury Insurance as well.
The executive director of Consumer Watchdog, a California consumer advocacy group Doug Heller said “Mercury’s proposal is a triple threat. You will pay an insurance penalty if you ever have a lapse in coverage; you will pay a penalty if you ever file any kind of claim; and you will pay higher uninsured motorist premiums. That might be good for Mercury, but it’s no good for the rest of us.”
When it comes to ballot measures when you see a petition circulator in front of a supermarket or shopping mall, read the ballot measures you sign carefully because you will never know how your signature will come back to haunt you hard when it passes. Mercury Insurance is not afraid to spend over $500,000 to make a pile of turd to be dressed up like a box of gourmet chocolates. Paid circulators will be encouraged to lead you on that this proposed ballot measure will be consumer friendly, but it is only designed to undo the popular consumer protections of Proposition 103.
Consumer Watchdog wants to make sure that Californians who have been hit hard by the wildfires recently to take special care if they have Mercury Insurance for homeowners insurance. In the state of Florida, Mercury Insurance was fined due to their actions during the 2006 hurricanes in the state. Just as how Mercury wants to abuse their customers with their June 2010 ballot measure they terminated policies upon filing a claim, failed to pay full amount upon filing a claim, failed to deliver upon policies and failed to provide specific reasons for denial of claims.
People should understand that you cannot trust Mercury Insurance when they even were fined $250,000 in 2008 for violations of California state laws on claims handling practices and the California Department of Insurance has frequently investigated complaints about the company. All they care about is currying influence with Sacramento politicians where they donated $2.7 million compared to $2.2 million for the other leading auto insurers in California combined because they believe that removing consumer protections to maximize their profits. Mercury Insurance founder and Chairman George Joseph is already a billionaire in his own right unfortunately he believes in risking jail and the safety of the motorists in the quest of padding his wallet. Not all business executives are ethical and we cannot expect businesses to do the right thing in the absence of regulation, which is why the lack of regulation of industries can be abused by business.
VOTE NO ON PROPOSITION 17