Voters Could See Conflicting Insurance Measures on Nov. Ballot

Californians could wind up voting on competing auto insurance proposals in November if a proposed initiative backed by a consumer group gets enough signatures to make it onto the ballot.

At issue in both is whether insurers should be able to give discounts or surcharges based on whether a driver was uninsured in the past five years.

The secretary of state already announced that Californians will vote on a measure that would give insurers more versatility in setting rates based on consumers’ prior coverage history. That proposal–virtually identical to Proposition 17, which voters rejected in 2010–qualified last month for inclusion on the ballot and has gained a large amount of support from coverage providers in the state.

But backers of newer, proposed initiative are now soliciting signatures from Californians in the hopes that they will get voters to bar auto insurers from raising rates or denying coverage to people who lacked prior coverage, which would effectively cancel out the insurer-backed initiative already on the ballot.

The change to auto insurance regulations is actually just part of a larger initiative that mostly has to do with requiring health insurers to get approval from state regulators before implementing rate formulas.

It’s being heavily supported by Consumer Watchdog, which was a vehement opponent of Proposition 17.

To get on the ballot, supporters will have to collect 504,760 valid signatures and turn them in to state officials.

Insurance Industry’s Discount Is Consumer Watchdog’s Surcharge

Supporters of the initiative that would give insurers more options in pricing coverage say that allowing companies to base rates on coverage history–regardless of who provided that coverage–would help them provide cheap insurance in California to those who have consistently obeyed financial responsibility laws.

On the other hand, Consumer Watchdog focuses on the fact that while some Californians would benefit from the measure, many others would see higher rates simply because they were unemployed and couldn’t find coverage, moved away to college or went car-less for a period of time.

Consumer Watchdog and other supporters of the nascent initiative say they want to uphold the provisions of voter-approved Proposition 103, which took effect in the late 1980s and heavily regulated the variables insurers can take into account when setting car insurance rates.

Proposition 103 made it so that insurers can give policyholders a discount if they are renewing a policy, but it cannot give a discount solely because it is the first time the policyholder is buying coverage from them.

About Matthew Morisset
Matthew Morisset is a proud alumnus of the University of Redlands, where he obtained a degree in English Literature. Utilizing his passion for analysis and writing, Matthew looks for important trends in the auto insurance industry and their implications for consumers and the market as a whole.

No comments yet.

Comment on this article