Judge rules on Proposition 17 ballot measure

A June ballot measure that would create an open primary system in California is facing an 11th-hour legal challenge. (AP)

March 12, 2010 7:35:25 PM PST
There is a big question about what is going to happen to insurance premiums under Proposition 17, a ballot initiative we will be voting on this coming June. Mercury Insurance and others want the voter pamphlets to say the rates will go down, but a consumer group is fighting for them to say rates will go up.

If you are a driver who has had continuous car insurance with the same company, that loyalty could be considered to lower your premium. But if you switch companies, you are now a "new customer" and no longer eligible for that discount. Proposition 17, which is financially backed by Mercury Insurance, changes that.

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

Consumer Watchdog argues Prop 17 also allows insurance companies to charge a severe penalty to customers who do not 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 serving stateside, or they missed a single payment on their insurance," said Harvey Rosenfield with Consumer Watchdog.

Both sides pushed hard in court to change the Title and Summary of Prop 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. We think people should be able to move to new companies," said Yes on 17 attorney Steven Weinstein.

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

In the end, Judge Allen Sumner ruled the Title and Summary should say rates will go up for drivers who do not have continuous coverage, but consumer groups will have to tone down their argument and rebuttal.


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