logo

California Proposition 33 Will Change Auto Insurance Rates

image
Author: Bob Morris
Created: 04 October, 2012
Updated: 17 October, 2022
2 min read
Credit: daveynin / Flicker

California Proposition 33 will change auto insurance rates by allowing insurance companies to set rates based on a driver's history of continuously having insurance with any insurance company rather than just with the current insurer. Most drivers with a history of continuous insurance would be eligible for lower rates. However, some would pay more.

George Joseph, founder of Mercury Insurance, is the primary funder of Prop 33. He has contributed $8 million of his own money. He funded a similar measure, Prop 17, in 2010 with nearly $15 million. His deep pocket funding predictably makes the No on 33 forces suspicious as to his intent. His supporters say Joseph genuinely believes Prop 33 will increase competition and thus lower rates. Still, others may wonder why such a relatively trivial matter is even on the ballot at all. However, the California Constitution allows direct citizen participation in legislative matters by using the proposition process.

Proposition 33:

  • 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.

The nonpartisan Legislative Analyst's Office sees little difference in total tax revenue for auto insurance if Prop 33 passes:

Introducing continuous coverage discounts could reduce the amount of premiums paid by those who are eligible for the discounts. However, this would generally be made up by additional premiums paid by those who are not eligible for such discounts. The net impact on state premium tax revenues from this measure would probably not be significant.

Therefore, the dollar amount of auto insurance policies might not change much in California if Prop 33 passes, but some could end up paying much more:

If Prop. 33 passes about 80 percent of the state’s drivers could qualify for a continuous coverage discount. That discount will be paid for by drivers that don’t qualify — and they will likely end up paying substantially higher car insurance rates.

The Yes on 33 campaign says the proposition rewards responsible drivers while No on 33 says it will increase rates in ways that are prohibited now. Voters may wish to study the arguments on both websites before making a decision.

Latest articles

votes
Wyoming Purges Nearly 30% of Its Voters from Registration Rolls
It is not uncommon for a state to clean out its voter rolls every couple of years -- especially to r...
27 March, 2024
-
1 min read
ballot box
The Next Big Win in Better Election Reform Could Come Where Voters Least Expect
Idaho isn't a state that gets much attention when people talk about politics in the US. However, this could change in 2024 if Idahoans for Open Primaries and their allies are successful with their proposed initiative....
21 March, 2024
-
3 min read
Courts
Why Do We Accept Partisanship in Judicial Elections?
The AP headline reads, "Ohio primary: Open seat on state supreme court could flip partisan control." This immediately should raise a red flag for voters, and not because of who may benefit but over a question too often ignored....
19 March, 2024
-
9 min read
Nick Troiano
Virtual Discussion: The Primary Solution with Unite America's Nick Troiano
In the latest virtual discussion from Open Primaries, the group's president, John Opdycke, sat down ...
19 March, 2024
-
1 min read
Sinema
Sinema's Exit Could Be Bad News for Democrats -- Here's Why
To many, the 2024 presidential primary has been like the movie Titanic - overly long and ending in a disaster we all saw coming from the start. After months of campaigning and five televised primary debates, Americans are now faced with a rematch between two candidates polling shows a majority of them didn’t want....
19 March, 2024
-
7 min read