Proposition 17 Changes California’s Car Insurance Rules

Proposition 17, which will appear on the June ballot in California, could result in big changes for purchasers of car insurance in California. The proposition was written and funded by Mercury Insurance, California’s fourth-largest auto insurance company.

 

The proposition would allow auto insurance companies to charge customers more if they have never previously been insured. Proposition 17 also penalizes drivers who dropped coverage for more than 90 days over the last five years (with an exception for overseas military personnel) or who missed one insurance payment.  Those who stopped driving and didn’t need insurance would be required to pay up to $1,000 more for car insurance when they restarted coverage. Current California law prevents that surcharge.

 

Those drivers who did maintain continuous auto insurance would be eligible for a continuous coverage discount, which they could keep if they changed insurance companies. Under current California law, drivers who switch insurance companies cannot receive the continuous coverage discount.

This is bad for consumers. My general rule is that if the insurance companies are spending millions on a ballot initiative, and Mercury is, then this is only good for them. Additionally, the insurance companies are trying to undermine the authority of the insurance commissioner. While I do not think the insurance commissioner should be an elected office, at least for now consumers get to have some say in who will protect them from the insurance companies. I am urging everyone to vote no on Prop. 17.