Monday, February 8, 2010
Backer of Auto-Insurance Measure Has Ugly Record
Politics / Business Robert Gammon — Mon, Feb 8, 2010 at 10:32 AM
Mercury Insurance Company, the sponsor of a June ballot measure that would allow auto insurers to charge higher rates to low-income drivers, appears to have engaged in numerous illegal and discriminatory practices over the years, according to a report by the state Department of Insurance obtained by the Chron. It’s not clear whether Mercury will face any penalties from its actions, but consumer advocate Harvey Rosenfield told the newspaper that if voters approve Proposition 17, it will allow the insurance company to “legalize the kind of discriminatory surcharges that they were caught doing by investigators.”
The state investigation, which ran from the mid 1990s to 2004, revealed that Mercury apparently discriminated against people who had been in accidents caused by others, military personnel, artists, actors, dancers, and emergency vehicle drivers in violation of state law. The company, which has a long history of using campaign funds to coerce politicians into doing what it wants, also duped new customers by quoting discounts that it never provided and requested that its customers reveal their “national origin.”
Prop. 17 would overturn existing consumer protections and would allow Mercury and other insurers to charge higher rates to people who have allowed their auto insurance to lapse. The company is advertising the proposition as a way to give discounts to drivers who have maintained their insurance, but consumer experts agree that the measure would adversely impact low-income motorists, who let their insurance lapse because they lost their jobs or got in financial trouble. Attorney General Jerry Brown also greatly helped Mercury by not mentioning this fact in the official ballot summary for the June Election.
Comments (4)
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Yes on prop 17-there is absolutely nothing wrong with it. It will allow the majority of responsible customers to get a lower premium and to cross-shop for a better rate. What this does is open up competition between the insurers to get your business. Who doesn't want lower rates? Harvey Rosenfield has a personal vendetta against Mercury for whatever reason and is NOT on the consumers' side....
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Insurers offer persistency discounts now. Allowing higher rating for people with lapses is not needed. Instead of rating the policy differently for people with a lapse they can alread offer a dscount to people without them as a persistency of coverage discount. Carriers already do it.
Bryan,
Mercury's initiative also allows auto insurers to charge higher rates to people who, for whatever reason, decide to go without a car for a while and cancel their policy, and even sell their vehicle, but then later choose to start driving again. Jerry Brown's ballot summary also failed to note this.
