This is an issue that stretches back decades. In 1988 car insurance rates were regulated when voters passed Prop. 103. The law says rates must predominately be based on driving safety record, annual miles driven, and years of driving experience. The law specifically says coverage history cannot be considered. But if you stay with a single company long enough, it may offer you a loyalty discount.
Harvey Rosenfield wrote and shepherded the passage of Prop. 103, while George Joseph is the founder and chairman of Mercury Insurance. The two have been adversaries for decades, and the fight has been joined again, this time over Proposition 33 where Joseph is the major financial backer.
"Prop 33 simply provides that if you have earned a discount, a loyalty discount, a new company could also consider that and offer you a discount for longevity," Joseph said.
But those opposed don't focus on the discount for those drivers, they see a surcharge on those who haven't been insured, "It is like a preexisting condition in your health insurance policy," said Rosenfield. "It had nothing to do with people's driving record. Under Prop. 33 you can be a great driver and just chose not to drive for a while and you get hit with this surcharge."
Now, Prop. 33 does offer protection to anyone who has an insurance lapse of 30 days or less, those unemployed for up to 18 months, and military personnel, although not their spouses.
When asked why consumers should believe an insurance executive wants to save them money, Rosenfield answered, "I am not saying you should believe that. But I am saying to you since you are an insured person the only thing I am offering you is the freedom to move. And if it turns out I can save you money you can decide whether to move."
Rosenfield remains unmoved, asking why change what has worked, "You go to the grocery store, they don't ask you at the checkout, 'Hey, is this your first time buying milk?', 'Well, yeah.' , 'Well I am sorry we are going to have to surcharge you because you have not bought milk from us before'. I mean think about it, it is lunacy."
Some will tell you with Prop. 33 you can take your discount with you. That is not true. Discounts are decided by each individual company. You can't force them to give you a discount they aren't offering.