California’s Proposition 33 Fails at Ballot

The initiative that sought to modify California’s long-standing pricing structure on auto insurance had been rejected by the state voters who casted their votes on November 6.

The initiative dubbed as Proposition 33 wishes to allow insurance companies to include the driver’s coverage history in considering their premiums. The said proposition sought to modify Proposition 103 which was in effect since 1988 and considers 19 factors in pricing auto insurance policies, including that of the policyholder’s driving history and the type of vehicle being insured.

Proponents of the said initiative said that in considering the driver’s coverage history will have allowed auto insurance consumers to have discounts for having good insurance records. The proponents also believe that Proposition 33 could also encourage competition in the auto insurance industry, thus bringing down its rates. The initiative was backed by an insurance giant, George Joseph, chairman of Mercury.

Joseph was reported to have spent millions of dollars from his pockets to campaign for the said proposition which is actually a follow-up on the earlier Proposition 17 that was also rejected by voters in 2010.

The Consumer Watchdog which have advocated against the proposition being lobbied by Joseph described the Nov. 6 polls’ result as that Proposition 33 was “crushed by voters”.

The said consumer advocacy group also has their own proposal which they wish to be put on ballot. This proposal is called the Insurance Rate Public Justification Accountability Act (IRPJA) which sought to establish a regulatory structure on homeowners and health insurance that is similar to that of auto insurance which will bar insurance companies from considering their past insurance coverage and credit history in rating their premiums.

The said initiative failed to acquire the minimum number of signatures required to have their proposal for this year’s ballot. However, this proposal had qualified for the August 2014 balloting.