Advocates Calls on AG Jerry Brown to Review Evidence and Explain Premium Increase in Official Summary of Initiative
SANTA MONICA, Calif., Jan. 26 /PRNewswire-USNewswire/ -- Campaign for Consumer Rights (CCR), the campaign affiliate of Consumer Watchdog, has released a new video today showing that motorists pay surcharges of up to 227% for auto insurance in states where Mercury Insurance is allowed to penalize people for not having prior insurance coverage, according to Mercury's own web siteThis video checked premiums in states that Mercury Insurance identifies as the models for the ballot measure it has qualified for the June 2010 ballot.
The proposed Mercury Insurance initiative seeks to gut a provision of the 1988 insurance reform measure Proposition 103 that prohibits insurance companies from surcharging people who have not driven previously, had a lapse in coverage for any reason, or have even missed a single insurance payment.
CCR has sent the video and an associated letter to Attorney General Jerry Brown asking him to review this evidence in advance of his release of the final Title and Summary for the initiative, and include the fact that this measure will allow insurance companies to raise auto insurance premiums, not just lower them.
Last week, CCR released a video showing how Mercury surcharged a Nevada resident 73% for his premium because there are no Prop 103 protections in the Silver State. Mercury's front group, Cal-FAIR, called the smoking gun video "lame and misleading," saying that it was inappropriate to compare what would happen to California drivers under the initiative to the premium surcharges faced in Nevada.
In the new video, Proposition 103 author Harvey Rosenfield quotes the exact language of the Mercury Insurance initiative, which says that the purpose of the measure is to "simply bring California into line with other states like Texas, New York,Oregon, Washington and Florida."
He then provides the evidence that in those states, as in Nevada, Mercury's surcharge proposal drives up premiums for good drivers who have done nothing wrong. The results are staggering:
-- In Texas, Mercury forces a person whose coverage lapsed while were serving in the military to pay 33% more. Mercury's website actually asks if you were on active duty in order to impose the soldier surcharge;
-- Mercury charges 74% more in Texas for a driver who didn't previously have auto insurance because he did not have an automobile (and did not require insurance);
-- In New York, a consumer faces as much as an 81% "no prior insurance" surcharge; and
-- In Florida, Mercury's website quotes a 227% increase for a driver with a perfect record if he did not have insurance at the time he requested the policy.
"Mercury Insurance will spend millions to lie to voters about the impact of its initiative, which is why it is so important that Attorney General Jerry Brown provide Californians with the truth that it will raise insurance costs for millions of Californiadrivers," said Rosenfield. "In the plain language of its initiative, Mercury says its initiative would make California like Texasand Florida, so Brown must disclose what happens to drivers in those states."
