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Debating California’s Prop 33, auto insurance discounts

Proposition 33 could affect millions of drivers in California.
Proposition 33 could affect millions of drivers in California.
Kevork Djansezian/Getty Images

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Are you a driver in Los Angeles? (Is that a stupid question?) Well, if you are, then Proposition 33 is one of the upcoming ballot initiatives that could have a huge impact on your finances.

As it stands now, California insurance companies offer a “continuous coverage” discount, so you get a better rate for being a loyal customer and a safe driver. However, the discount only applies to that particular company, and if you transfer to another provider, the discount is lost. Proposition 33 would instead make it possible to get at least some sort of cost reduction when switching agencies, as long as you’ve had coverage for at least five years.

Proponents of the initiative say this will make insurance companies compete more for customers, thus driving the costs down. Opponents stress that this discount only applies to those who already have had insurance for some time, and to offset the reduced costs for loyal customers, prices would rise for everyone else, which could lead to more people being uninsured. That’s a financial burden on those who haven’t had coverage for five straight years, and could make the roads a lot less safe.

Plus, Proposition 33 draws 99.5 percent of its funds from George Joseph, chairman of auto insurer Mercury General, who just dropped another $8 million in the Yes on 33 campaign yesterday. Are there ulterior motives there?

Prop Breakdown:

Official Title: Automobile Insurance Persistency Discounts Initiative

  • Changes current law to allow insurance companies to set prices based on whether the driver previously carried auto insurance with any insurance company.

  • Allows insurance companies to give proportional discounts to drivers with some history of prior insurance coverage.

  • Will allow insurance companies to increase cost of insurance to drivers who have not maintained continuous coverage.

  • Treats drivers with lapse as continuously covered if lapse is due to military service or loss of employment, or if lapse is less than 90 days.
  • Weigh In:

    Which side is more effectively pitching to the public? Is it fair for auto insurance to be raised on the uninsured? Do you wish you could switch insurance agencies and maintain your discount?


    Rachel Hooper, campaign consultant for Yes on Prop 33

    Carmen Balber, director of the Washington office for Consumer Watchdog, an advocacy group that has been highly critical of the insurance industry