Calif. Insurance Measure Sparks Website Spat, Gets Endorsement

The rhetoric behind an auto insurance measure in California is heating up as election season nears and voters decide on coverage discounts that the proposal’s backers say will be expanded if passed.

The 2012 Automobile Insurance Discount Act, which will appear on the November ballot as Proposition 33, seeks to roll back current law allowing customers to obtain discounts for continuous coverage only within the same company and establish cross-company discounts that consumers could take from insurer to insurer.

Proposition 33 Backers Return Websites After Internet Row

Proposition 33 supporters have long been locked in a political battle with consumer advocates like Consumer Watchdog, who say the proposal is a veiled attempt to entice consumers with the prospect of reduced prices while shortchanging vast groups of motorists.

Yesterday, Consumer Watchdog accused the Proposition 33 backers of violating state law by purchasing addresses that could be used for negative campaigns against the proposal, including StopProp33.org.

Consumer Watchdog said the scheme built on Proposition 17, a similar proposal that ultimately failed in 2010 and was also backed by Proposition 33 supporter Mercury Insurance. Consumer Watchdog waged its campaign against Proposition 17 using a similar website, StopProp17.org.

Wrangling between the two groups happened in full public view, with a Consumer Watchdog consultant addressing the organization’s opposition letter directly to Mercury Chairman George Joseph.

The proposition’s supporters responded on its website the same day, saying that it plans to return the website addresses that referred to stopping the Proposition 33 campaign but insisting that its initial ownership of the websites was not malicious.

“The consultants purchased domain names when the designations of the 2012 state ballot measures were unclear and subject to litigation in California courts,” said Mike D’Arelli, executive director of the American Agents Alliance, a Proposition 33 proponent. “We never expected to silence anyone.”

According to D’Arelli, Consumer Watchdog has proved itself to be malicious in a number of campaign “scare tactics,” including this latest spat over website domains.

“One thing we agree on is that you cannot stop the shrill bark of Consumer Watchdog,” he said. “They are making a big deal out of nothing.”

Mercury, Company Chairman a Focus of Watchdog Campaign

Consumer Watchdog’s campaigns against Proposition 33 and Proposition 17 have focused especially on Joseph, which the organization has referred to as a “billionaire chairman” and “Chairman Grinch”; a Watchdog website page includes “10 Reasons Not to Trust” Joseph.

Sen. Juan Vargas (D-San Diego), a Proposition 33 supporter, has said Watchdog’s campaigning made him “extremely disappointed.” Consumer Watchdog has “resorted to fear-mongering and name-calling in an ugly bit of behavior,” he said in a March statement.

Proposition 33 opponents contend that expanding continuous-coverage discounts to include all insurers will actually inflate the cost of auto insurance coverage in California, particularly those who have had gaps in their coverage for legitimate reasons. Those motorists can include the long-term unemployed, the sick who gave up coverage because they couldn’t drive and mass-transit riders. The proposition does include certain exceptions for military personnel and unemployed Californians, however.

Proposition 33 is billed as a consumer-friendly measure providing discounts although it will raise overall rates, according to Watchdog.

“When California voters go to the polls in the November, they should ignore the insurance industry’s slick ad campaigns,” said Watchdog spokesman Douglas Heller in a statement.

State Firefighters Endorse Initiative

Proposition 33 also picked up union backing this week from CAL FIRE, the state’s largest fire department. CDF Firefighters Local 2881, which represents CAL FIRE, said the new discounts provided by the measure would help more motorists get coverage.

“We see firsthand the difficulties that are caused by lack of insurance,” said Bob Wolf, the union’s president, in a statement. “It’s time to help everyone get insured—and this initiative takes a significant step in that direction.”

Other Proposition 33 supporters include the state’s Veterans of Foreign Wars (VFW), the state Republican Party and the United Services Automobile Association.

About Charles Nguyen
Charles Nguyen is an enterprising journalist who reported for Patch.com and the Desert Dispatch and was the editor in chief of the Guardian (the twice-weekly newspaper at the University of California, San Diego) before coming to Online Auto Insurance News.

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