Our San Francisco insurance attorneys know everyone in the US is paying close attention to this year’s upcoming election. In California, aside from the presidential election, there are also several state issues to be decided in November. One of these is a ballot initiative dealing with automobile insurance, and we have talked about it in a previous blog post. The issue is Proposition 33, which if passed would allow insurance companies to offer discounts to new customers who can prove they have had auto insurance for the last five years. It addresses Proposition 103, which requires personal auto insurance rates to be determined using factors in decreasing order of importance: insured driver’s safety record, number of miles driven annually by the insured, and number of years driving experience of the insured. A similar measure was narrowly defeated in 2010. And as with that initiative, there are two sides to the debate about the proposal.
Proponents say that the 2012 version includes consumer protection language not included in 2010, although they argue this could be harder to convey if the language in the sample ballot is kept, according to reports from the campaign. The Prop 33 campaign is taking issue with both the ballot description of the proposition and the opponent’s language, saying that those who wrote the language may not understand the California insurance industry. Proponents filed a lawsuit over this issue in the Superior Court of California last week, naming Secretary of State Debra Bowen, Attorney General Kamala D. Harris, and Consumer Watchdog founder Harvey Rosenfield as respondents. It was filed on behalf of American Agents Alliance’s executive director Michael D’Arelli, one of Prop 33’s major backers. The case is expected to be heard next week, before the August 13 deadline for the copy of the ballot.
The current language of the ballot label states: “Changes current law to allow insurance companies to set prices based on whether the driver previously carried auto insurance with any insurance company. Allows proportional discount for drivers with some prior coverage. Allows increased cost for drivers without history of continuous coverage. Fiscal Impact: Probably no significant fiscal effect on state insurance premium tax revenues.” The Prop 33 campaign says the problem is with the phrase “allow insurance companies to set prices”. They claim this language is highly likely to prejudice voters into voting no on the measure, and is unnecessary. Instead, the group prefers the language: “Changes current law to allow an insurance company to offer a continuous coverage discount based on whether the driver previously carried auto insurance with any insurance company.”
On the other side of the debate, a spokeswoman from Consumer Watchdog stated that the Prop 33 proponents are trying to hide the part of the initiative that they “don’t want the public to see,” such as if a person has a lapse in insurance for any number of good reasons, there will be a surcharge if Prop 33 passes.
As a California insurance attorney, 2012 is an interesting year to watch insurance issues unfold in California and across the country.
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