Judge Rejects Mercury Insurance's Prop 17 Claims; Voters Will Be Told of Prop 17 Car Insurance Surcharges

SACRAMENTO, March 12 /PRNewswire-USNewswire/ -- Judge Allen Sumner has upheld Attorney General Jerry Brown's Official Title and Summary of Proposition 17, which warns the measure will allow car insurers to raise premiums.  The ruling means voters will learn in the ballot pamphlet that Prop 17 will allow insurance companies to raise rates on California drivers based on their history of buying auto insurance.

Attorneys for Mercury Insurance failed as it tried to convince the court to remove any reference to the insurance surcharges that Prop 17 will create.  Consumer advocates hailed the decision as a victory for voters, who will have the opportunity to cut through Mercury's multi-million dollar PR campaign and read a fair assessment of the insurance company's initiative in the Voter Guide.

"When voters face the deceptive, multi-million dollar insurance company ad campaign for Prop 17, at least they'll be able to turn to Attorney General Brown's summary to learn the truth," said consumer advocate Harvey Rosenfield who co-authored one of the ballot arguments against Prop 17.  "Now that the Judge has made it clear that Prop 17 lets insurance companies raise car insurance premiums, will the insurance company backers of Prop 17 stop lying about it?"

With the ruling, voters will read the following in the Official Title and Summary of Prop 17:

"Will allow insurance companies to increase cost of insurance to drivers who do not have a history of continuous insurance coverage."

The Judge rejected Mercury's attempt to strike out much of Prop 17 opponents' ballot arguments. He did require two cosmetic changes to the arguments, so the main argument against 17 now includes the statement:

It punishes our troops, among others.  This initiative raises rates on Californians who stop their insurance, including military serving stateside.  Penalizing these drivers by forcing them to pay more when they restart their insurance is wrong.

The rebuttal argument was amended to read: "you will get hit with surcharges of up to $1,000/year."

Proposition 17, which has been funded with $3.5 million from Mercury Insurance, would surcharge drivers, including soldiers and seniors, who have had a lapse in car insurance coverage for virtually any reason during the past five years.  Under the measure, people who stopped driving and didn't need insurance for a time would be required to pay up to a thousand dollars more for insurance when they sought to restart coverage.  Currently, insurance companies are prohibited from imposing the surcharge in California.

SOURCE Campaign for Consumer Rights

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