Considered one of the most car-centric regions in the world, the state of California is a place where a driver’s license is a VIP pass almost everyone wants. The highest populated state that exceeds that of the entire country of Canada, the car culture in California is a multi-billion dollar industry alone. With driving existing as such an important part for living in “The Golden State“, so many automotive-related organizations seek to claim riches and influence on the California motorist.
One of the dullest and sometimes inconvenient influences is the insurance industry. A necessary evil when accidents do occur, for so many it is just a monthly payment that eclipses all other maintenance costs. However, in the state of California, there exists a Proposition vote during Tuesday’s United States presidential election that has fired up many surrounding the car culture on changes to automotive insurance.
Called Proposition 33, the main purpose of act is to allow auto insurance companies to differ the cost of coverage for drivers in relations to their driving history. Discounts can be offered to licensed motorists who can prove they have been insured for five years as long as they can prove they have been making continuous payments. Conversely, if most drivers have not been consistently insured, companies can charge increased rates. Exclusion to rate increases will apply to members of the military and people who have been unemployed for an 18 month or longer period of time.
With the California Secretary of State estimating the auto insurance industry’s value at $21 billion a year, the adjustments in Proposition 33 has become a contentious issue with supporters and opposition mounting strong lobbying campaigns. In respect to making a fair and honest decision at the ballot box, the following is the arguments for and against Proposition 33 in California.
Supporters suggest that Proposition 33 passing the ballot initiative allows customers to obtain better deals for insurance policies. Under the premise of Proposition 33, loyalty discounts can be offered to motorists who have routinely paid and continues paying for auto insurance. The bonuses can be greater the longer insurance is maintained by a driver. Proposition 33 will also grant insurance providers the ability to compete for driving customers by assuring loyalty discounts. Proposition 33 is also being advertised to encourages the uninsured to obtain policies on the premise that they will eventually earn discounts for continuous coverage.
Some powerful supporters to Proposition 33 include the California Association of Highway Patrolman, Veterans of Foreign Wars of California and several chamber of commerce groups in the state. The Greenlining Institute supports the measure stating “Simply put, Proposition 33 is good policy that will lead to lower rates by encouraging more competition among insurance carriers in California. On top of endorsements, chairman of insurance company Mercury General George Joseph has pledged just under $17,000,000 dollars in efforts to influence the passage of Proposition 33.
The ‘No’ Argument
Opposition to Proposition 33 are very concerned that the passage of the new insurance discount plans will give policy providers a new way to charge some drivers higher rates regardless to driving record.
The ‘No’ to Proposition 33 argues that insurance companies will grant authority to practically penalize newer drivers or motorists reacquiring insurance after periods of not driving. Those against Proposition 33 said students leaving college as well as those recuperating from major illness or injury would be impacted with “surcharges”. Opponents to Proposition 33 have also expressed unease that passage of the measure is deregulating the insurance companies to be less accountable.
With the many supporters for Proposition 33, the opposition in place to convince others to vote against the proposition is equally sizable. The Consumer Union (the publisher of the respected Consumer Reports magazines) is one of many critics to Proposition 33. The Consumer Watchdog and the California Federation of Teachers have also thrown support behind the “Stop Prop 33” campaign as part of a coalition. Proposition 33 is also strongly opposed by newspapers including the Los Angeles Times, San Jose Mercury News and the Sacramento Bee. The Bay Area Reporter commented, “While purporting to save drivers money, this initiative statute really gives insurance companies virtually unlimited authority to hike rates.
In recognition of an important decision, voting for the 2012 US presidential election on Tuesday affects the country’s future. The result of Proposition 33 will also dictate the future to driving freedoms heading forward.
Information source: Consumer Federation of California, The Greenlining Institute, Yes On Prop 33
Photo source: Chris Nagy