Summary: Proposition 33, also known as the “Auto Insurance Pricing Initiative,” is the $8 million brainchild of one man: Mercury Insurance CEO, Gary Joseph. The proposition would change California law to allow insurance companies like Joseph’s to charge new consumers based on the length of time they have been insured previously.

Current state law only allows insurers to set rates based on a driver’s record, how long they’ve been driving and how far they drive every year. It would also provide a continuous coverage discount to long-term insurance customers and allow them to take that discount to a new insurer if they decide to switch. But it would force people with gaps in their car insurance coverage to pay more, even if they had no reason to drive before looking for new coverage.

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Joseph put an almost identical proposition on the ballot in 2010 that was defeated at the polls. This version would exempt members of the military from rate increases.

Supporters and Donors: Gary Joseph is almost single-handedly spearheading the proposition, pouring in more than 99 percent of the money to fund the campaign, according to KCET. The California Republican Party also supports Prop 33, in addition the Greenlining Institute, which describes itself as a “multi-ethnic public policy research and advocacy institute.” 

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Argument in Favor: Supporters argue that the proposition benefits consumers by allowing them to take their continuous coverage discount with them if they switch insurers.

Opponents: Prop 33’s main opponent is the nonprofit organization “Consumer Watchdog,” which has only raised about $100,000 to defeat the measure. The California Democratic Party opposes Prop 33.

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Argument Against: Critics claim the proposition is a money grab by Joseph and other auto insurers who are looking to bank off of those who may have stopped driving for a good reason even if they have perfect driving records. 

The Ads:

The “Vote Yes on Prop 33” folks are touting the effect the proposition would have on active military:

The Greenlining Institute points out that Prop 33 protects the unemployed from higher rates, but it fails to explain that it only exempts those who’ve been unemployed for at least 18 months:

Here’s a Fox 11 interview with Consumer Watchdog President Jamie Court responding to the “Yes on 33” campaign’s ad by saying it would still affect the families of military members in addition to college students who don’t drive while in school.

 

Read more of Neon Tommy's coverage of California's propositions here.

Reach Staff Reporter Omar here; follow him on Twitter.