Consumer Watchdog – Affordable Car & Home Insurance - Insurance Reform & Prop 103

In 1988, Californians revolted against excessive auto, homeowner and business insurance premiums and other abuses by insurance companies. They passed a ballot measure, Proposition 103, which ordered insurance companies to roll back rates by 20%, required an ongoing 20% discount for good drivers, imposed stringent regulation of the insurance industry, and stripped away special laws that allowed insurers to cheat their policyholders. Here's a link to the text of Proposition 103.

Insurance companies spent $80 million in their campaign to defeat the measure, but on election day the voters approved Proposition 103, which was written by Consumer Watchdog founder Harvey Rosenfield. Proposition 103 forced insurance companies to refund over $1.2 billion dollars to Californians and has blocked more than $23 billion in automobile insurance rate increases since 1988.

California's Proposition 103 gave California consumers powerful protection against insurance company abuses. Proposition 103 applies to auto insurance, homeowners and renters insurance, business insurance and other forms of liability and property insurance. (It does not apply to health insurance, life insurance or workers compensation insurance.)

This page is a portal to Prop 103 resources and the ongoing efforts to reform the insurance industry.

• Read the text of Proposition 103. This is the full text of California's 1988 historic insurance reform law as approved by the voters, including subsequent amendments that have been enacted.
• Read the Main Provisions and Current Status of Prop 103
  This table shows the current status of important provisions of Proposition 103.
• Insurance companies all too frequently violate provisions of Proposition 103. It pays to know your rights! For a link to detailed fact sheets about each provision of Prop 103 click here.

The links below detail the voter revolt that led to the passage of Proposition 103 and provide explanations of the how the law works.

Insurance Reform in California: The 1988 Battle for Proposition 103
Read a history of the $80 million "David vs. Goliath" battle to reform California's insurance industry at the ballot box.

View the Official Voter Ballot Pamphlet
These are the original arguments in favor of and against Proposition 103 published by the Secretary of State prior to the 1988 election.

View an Insurance Industry Ad Against Prop 103
This is a mailer from the insurance industry's unsuccessful $80 million campaign to defeat Prop 103.

An Analysis of California Proposition 103
This is a detailed description of Proposition 103, explaining the purpose and impact of its main reforms.

Proposition 103's Impact on Auto Insurance Premiums in California
This 2008 study by J. Robert Hunter of the Consumer Federation of America shows that Proposition 103 has saved Californians $62 billion on our auto insurance premiums and is a model for other states faced with insurance industry price-gouging and abuse. Download the report.

Read the news release about 15 years of Prop 103 data.
Download FTCR's 2007 report showing the impact of Prop. 103.

The Right to Sue Under Proposition 103
Proposition 103 gave consumers a powerful new right to challenge the rates and practices of insurance companies in California courts, as well as before the California Department of Insurance. This monograph, useful for lawyers representing consumers, discusses this little-known tool in more detail.

Elected Insurance Commissioner
Proposition 103 made the office of insurance commissioner an elective post so that consumers can hold the commissioner accountable. Insurance companies have tried hard to regain control of the office through corruption. Follow this link to read more about California's elected commissioners.

The Insurance Industry's Idea of Reform: Eliminating Consumer Rights
Insurance companies oppose regulation and other reforms that limit their conduct. Instead, they lobby for legislation that restricts, rather than expands, the rights of consumers -- "tort reform." There are big differences between consumer-backed reforms and the insurance industry campaign, backed by other industries, to restrict the right to go to court. Read a fact sheet that describes the differences.