California’s initiative Proposition 17 would allow car insurance companies to increase premiums for millions of California drivers based on their history of purchasing auto insurance. The ballot measure is funded by Mercury Insurance, California’s third largest auto insurer. To date, Mercury has spent $5.25 million on its Prop 17 campaign.
Prop 17 would create an insurance surcharge on drivers, including soldiers and seniors, who have had a lapse in car insurance coverage for virtually any reason during the past five years, or who missed a single payment.
Under the measure, people who stopped driving and didn’t need insurance for a time would be required to pay up to a $1000 more for car insurance when they sought to restart coverage. Currently, insurance companies are prohibited from imposing such a surcharge in California.
Last week, California’s Insurance Commissioner, Steve Poizner, announced an administrative lawsuit against Prop 17 sponsor Mercury Insurance in response to findings of widespread overcharges and illegal discrimination by the company. Mercury’s reputation for cheating policyholders is also reflected in the company’s consistently low J.D. Power customer satisfaction ranking.