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Props To You: Prop 33 wants to expand car insurance loyalty discounts

Ford Taurus automobiles sit on the sales lot at World Ford July 9, 2002 in Pembroke Pines, Florida.
Ford Taurus automobiles sit on the sales lot at World Ford July 9, 2002 in Pembroke Pines, Florida.
Joe Raedle/Getty Images

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Let's go back to 1988: Tom Hanks is starring in the movie "Big." George Michael's "Faith" is topping charts, and here in California, voters passed proposition 103. That prop put limits on the ways insurance companies could set rates. Currently there are 16 factors insurance companies can use to price your policy: A driver's safety record, how long he/she has been driving, and the number of miles he/she drives a year.

You can also get a lower rate if you've been with your insurance provider for a long time. However, if you switch providers that's gone. Prop 33 would let you keep that "continuous coverage discount" even if you change from say Geico to Progressive.

 "We think that consumers should be able to own their own history of being responsible and maintaining car insurance," said Rachel Hooper of the Yes on 33 campaign. "And shop that discount with the insurance company they choose. And by doing that it will make the insurance industry much more robust and competitive. It will lowers rater and ultimately insure more Californians."

Hooper says that supporters of 33 include the California Association of Highway Patrolmen. And because it doesn't penalize members of the military who drop insurance when they are serving, it also has support from the American Legion and other veterans groups.

However, plenty of groups have also come out against 33, including the California Labor Federation, the California Federation of Teachers and groups like Consumer Watchdog.

Some critics argue that the measure would allow car companies to charge more to folks who haven't been insured continuously. For example, people whose covered lapsed for some reason or are getting insurance for the first time could be hurt.

"They are going to be charged a lot more for their auto insurance. You have people who stop driving because they go to do foreign service in an embassy. They use mass transit because they lived in New York or they go to college. All these people would pay a very large surcharge," said Jamie Court, president of Consumer Watchdog. 

According to Court, this surcharge will price out some drivers who just won't be able to afford insurance. That would mean more uninsured drivers on the road, which, he says, would raise what people pay to protect themselves in case of an accident with an uninsured driver.

So far, the No On 33 groups have raised around $200,000, but the largest chunk of money has gone to the Yes on 33 side, most of it from 91-year-old Mercury Insurance founder George Joseph. He has already poured over $16 million of his own money into the Yes on 33 campaign. 

This isn't the first time Joseph has tried to get something like Prop 33 this passed. In 2010, Jospeh spent big on Prop 17, which was a similar to rop 33. Voters rejected it then, but he's made some changes to the new measure, including the addition of exemption for members of the military, and now it's back on the ballot.

There's not a lot polling on this one, it's not getting as much attention as the education measures or the GMO labeling propositions. A recent poll by Pepperdine and The California Business Roundtable has support for 33 at 48 percent, with 37 percent against it.