Legal Battle over California’s Prop 17 Heats Up

Posted & filed under California Car Insurance.

California’s Sacramento Bee reported last week that the legal battle over the language in ballot initiative Proposition 17, which addresses auto insurance discounts.

Consumer advocate Harvey Rosenfield, well-known in California as a vocal opponent of Proposition 17, filed a lawsuit in the Sacramento Superior Court on March 4th, The suit demands that the language in the proposition summaries that will be sent to voters. This suit is in direct response to another suit filed the week before by backers of Proposition 17, a group which is led by auto insurer Mercury General Corp.

In their lawsuit, the pro-Prop 17 camp claimed their opponents are misleading the voters. Rosenfield’s suit alleged the same things of Mercury.

The continuing debate is over a discount that insurers are already able to offer their customers who have maintained continuous coverage, and have not missed any premium payments. With Proposition 17, Mercury Insurance wants to make this discount “portable” – meaning they can offer it to customers of other companies. Mercury’s argument is that this will make the California insurance landscape more competitive.

Rosenfield, on the other hand, opposes the proposition because he feels that insurance should be a “zero-sum system.” His concern is that those drivers who don’t qualify for the discount will be stuck paying surcharges to make up for the discounts others are receiving.

The proposition is set for the June ballot.

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