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.

Recent Articles:

Insurance Regulation Expert Calls For Freeze Of Health Rates Until 'Prior Approval' Regulation Is Adopted

CONTACT: Jerry Flanagan, (310) 889-4912; or Carmen Balber, (202) 629-3043
March 10, 2010

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Auto Insurer Revs Measure's Motor

By Howard Fine, THE LOS ANGELES BUSINESS JOURNAL
March 8, 2010

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Arguing Over The Arguments

By Torey Van Oot, THE SACRAMENTO BEE
February 26, 2010

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Backers of Auto-Insurance Measure Sue Over Ballot Pamphlet Language

By Josh Richman,THE OAKLAND TRIBUNE
February 25, 2010

Read More »

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Recent Posts in Affordable Car & Home Insurance:

Health insurance premium curbs are catching on

Consumer Watchdog's calls for tough and open health insurance rate regulation are being echoed and amplified. The latest instance is in Connecticut, the home state of insurance companies, where Attorney General Earl Blumenthal recently proposed major reforms that would require the state to review and reject, modify or allow a rate change before it goes into effect. No more shrugging and letting it happen without a public review.

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Jerry Brown gets it right on Prop 17's Title & Summary

California Attorney General Jerry Brown has issued his final ballot label for Proposition 17, the Mercury Insurance-financed ballot measure to surcharge those with lapses in auto insurance coverage.  Brown got the ballot label right this time, acknowledging Prop 17 allowed insurers to increase premiums, as well as lower prices, based on whether a driver has a lapse in insurance coverage.

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Anthem as "Exhibit A"

Kevin Sack hits it right on the head in today's New York Times with his story about how Anthem's 39% premium increase in California embodies the need for health care reform. The missing element is prior approval health insurance regulation.

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Chronicle reveals discrimination at Mercury Insurance, Soldiers targeted

In case all those ads about how great insurance companies are was starting to make you feel all fuzzy inside, Carla Marinucci at the San Francisco Chronicle just posted a revealing and disturbing look into the widespread discrimination at California's 3rd largest auto insurer, Mercury Insurance....

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Inside Jerry Brown's brain, the illegal tapes

It's rare that you get to hear what's in the brain of a powerful politician because his phone conversations were taped.

Listening to Jerry Brown opine, berate and spin reporters about their age, his age, what they should...

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Mercury Scrutinized By Regulators For Breaking The Law While Trying To Pass Prop 17

Mercury's Deceptive Initiative

Celebrating 20 Years of Prop 103

Prop 103 Credited with $61.7 Billion in Savings