Insurers are looking to raise rates

Industry seeks change to enable rate increases

Days ago, the California Department of Insurance cracked down on an insurance company that has been overcharging motorists for 15 years. The company, Los Angeles-based Mercury Insurance, wrote and is bankrolling Proposition 17. Mercury wants you to believe that its measure will save everyone money.

When was the last time an insurance company spent $5 million on a ballot initiative to lower your rates?

In fact, Mercury’s Prop. 17 gives insurance companies the power to raise rates for millions of Californians. That is why you should vote no.

This deceptively written initiative would allow insurance companies to surcharge people who have not been previously insured – even if they are perfect drivers but never owned a car. Prop. 17 also penalizes anyone who had to drop coverage for more than 90 days over the past five years or who missed one insurance payment.

These surcharges are illegal in California today: The voters banned them in 1988. But in states that have laws similar to Prop. 17, the surcharges can raise the price of car insurance by 200 percent or more, adding thousands of dollars to the annual cost of insurance.

We must stop Prop. 17 because, if it passes, everyone will pay more:

People who use mass transit for a period of time. Ditto for college students who don’t need a car until the summer. Or people who, in this horrible economy, simply can’t afford to pay for insurance even if they are good drivers. Prop. 17 would even punish Californians who serve in the military stateside and must interrupt their coverage while in boot camp.

Californians are rightly suspicious when big corporations try to manipulate the initiative process for their own self-interest: Prop. 17 is one of two special-interest initiatives funded by big corporations on the June ballot. (The other is PG&E’s Proposition 16.)

Mercury has proved that it cannot be trusted. Arguments about 17 made by the company and its paid spokespeople have been repeatedly reviewed and rejected as false by the courts and state regulators.

And just last week, the insurance commissioner brought an administrative lawsuit against Mercury alleging that it had engaged in 55 practices that are illegal in this state, victimizing thousands of Californians. Investigators discovered that Mercury did not give customers the discounts they were entitled to and overcharged people just because they were self-employed, worked out of their homes, were waitresses or had health problems. The company even broke its own pledges to regulators that it would stop violating California laws. The company faces tens of millions of dollars in fines. Mercury Insurance’s sponsorship of Prop. 17 is like Bernie Madoff backing a ballot proposition claiming to protect investors.

The last thing California families can afford right now is an initiative that makes insurance companies less accountable for their actions and leads to more uninsured motorists and skyrocketing auto insurance premiums. That’s why Consumers Union, the nonprofit publisher of Consumer Reports magazine, veterans groups and seniors all agree: Vote no on Prop. 17.

For more information, go to stop prop17.org.

Source: www.sfgate.com