• BREAKING NEWS ABC shows live and on-demand -- Download the WATCH ABC app!

How will Prop 17 affect insurance premiums?

March 12, 2010 12:00:00 AM PST
The battle over Proposition 17 ballot language came to a head Friday, when a Sacramento County Superior Court Judge heard arguments in a series of cases. Mercury Insurance sponsored the measure, allowing insurance companies to raise premiums on some California drivers.If you're a driver who's had continuous car insurance with the same company, that loyalty could be considered to lower your premium.

But if you switch companies, you're now a "new customer" and no longer eligible for that discount. Proposition 17, which is financially backed by Mercury Insurance, changes that.

"We think consumers should be able to take their continuous coverage discount with them. It's going to result in lower rates, more competition and more choice," said Mike D'Arelli, Alliance of Insurance Agents & Brokers.

Consumer Watchdog argues Prop 17 also allows insurance companies to charge a severe penalty to customers who don't have a history of coverage, therefore, the voter pamphlet should say the initiative will raise rates.

"It allows insurance companies to surcharge people just because they didn't have previous insurance, maybe they didn't even have a car, or they were in the military stateside, or they missed a single payment on their insurance," said Harvey Rosenfield, Consumer Watchdog.

Both sides pushed hard in court to change the Title and Summary of Proposition 17, as well as the argument and rebuttal wording.

Voter pamphlets help educate people and therefore can sway an election's outcome.

"We think things should be open. People should be able to move to new companies," said Steven Weinstein, attorney, Yes on 17.

"It's like saying it's the 'good student' discount. We're just extending it to people who fail as well," said Fredric Woocher, attorney, No on 17.

In the end, Judge Allen Sumner ruled the Title and Summary should say rates will go up for drivers who don't have continuous coverage, but the consumer group will have tone down their argument and rebuttal.


Load Comments