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Extending Insurance Discounts

SACRAMENTO BEE

Call it a rematch. Proposition 33 is Los Angeles insurance executive George Joseph's plan for liberalizing the rules on auto premiums.

For years Joseph has been trying to extend "good-driver" discounts to more motorists, with no luck.

In 2010 his company, Mercury Insurance Group, bankrolled an initiative similar to Proposition 33 but was defeated. What's wrong with more discounts?

Critics say they create winners and losers. For every motorist who gets a discount, someone else pays more.

Consumer advocate Harvey Rosenfield, who has fought this issue for years, says Joseph's plan would unfairly penalize many California motorists.

 

WHAT IT DOES

• Loosen laws on auto insurance premiums.

• For the first time, let insurers offer "good-driver" or persistency discounts to new customers who maintained continuous coverage with another insurer. Existing law lets insurers offer these discounts only to current customers.

• Let insurers increase premiums for drivers who haven't maintained continuous coverage.

WHAT IT COSTS

State believes it would have minimal impact on premium tax revenues.

SUPPORTERS

• George Joseph, chairman of Mercury Insurance Group

• Alliance of Insurance Agents and Brokers

• Former Assembly Speaker Willie Brown

WHAT SUPPORTERS SAY

• It's a consumer-friendly measure that will introduce more price competition into the market.

• It gives longtime motorists more freedom to shop around. They can take their"persistency" discounts with them to other companies.

• It rewards those who are"being responsible" by maintaining continuous coverage.

MONEY WATCH

Almost all the funding for Proposition 33 is from Mercury Insurance Chairman George Joseph, $8.23 million. Others include Abernathy Insurance Agency of Arcadia, $14,000; College Student Insurance Service Inc. of Garden Grove and Shepard Insurance Agency of North Hollywood, $5,000 each.

ON THE WEB

Yes on 33: www.yesprop33.com

OPPONENTS

• Consumer Watchdog

• Consumers Union of the United States

• California Alliance for Retired Americans

WHAT OPPONENTS SAY

• Because insurance is a"zero sum" game, the discounts given to some will result in higher premiums for others.

• It penalizes law-abiding motorists who let coverage lapse for legitimate reasons.

• It discourages drivers from even buying insurance.

MONEY WATCH

Major opposition funding has come from Consumer Watchdog of Santa Monica and its affiliate, the Campaign for Consumer Rights, which have donated $70,000. Consumer Federation of California gave $17,430.

ON THE WEB

No on 33: stopthesurcharge.consumerwatchdogcampaign.org

Contact the author at dkasler@sacbee.com