Prop 33 targets senior citizens for insurance rate hikes

Oct 26, 2012, 19:11 ET from California Alliance for Retired Americans

By Nan Brasmer, President, California Alliance for Retired Americans

SACRAMENTO, Calif., Oct. 26, 2012 /PRNewswire-USNewswire/ -- I am a senior citizen. I live on a fixed income. I'm voting No on Proposition 33 because it will raise automobile insurance rates on law abiding Californians like me, who have a health problem that keeps them off the road for a period of time.

Ten years ago, after living in pain for years, I had my hip replaced. I dropped my auto insurance for four months while I recovered.  After all, I could not drive, and this helped me save some money.

But if Proposition 33 were the law, I would have been punished with higher insurance premiums for the next five years simply because I suspended my insurance when I did not need it. That's not fair.

George Joseph, Mercury Insurance's billionaire Chairman, has spent over $16 million to pass Proposition 33.  He has tried to mask the measure as a way to reward responsible drivers. But the ads flooding the airwaves and filling our mailboxes don't tell the whole story. If Prop 33 becomes the law, insurers will be able to raise rates on millions of Californians, including those with perfect driving records.

California has good insurance regulation. Insurers must prove that a particular characteristic of a motorist is related to the driver's risk of having an accident before the company can use that characteristic for pricing insurance.  The Insurance Commissioner has the authority to reject unjustified premium rate hikes. Our state law has saved motorists $62 billion in insurance costs over a 16 year period, according to a national study.

But hidden in Prop 33's fine print, the measure explicitly exempts from regulation any insurer that raises rates on a good driver that has a break in coverage for 90 days within the past five years.  If it passes, the Insurance Commissioner would be powerless to stop insurers from surcharging responsible drivers like me.

In Texas, Florida and other states where these good driver surcharges are legal, Mercury Insurance tacks an extra 40% or more onto a good driver's bill, if the motorist temporarily suspended coverage while laid up in a hospital bed, unable to drive. That's why the Attorney General's Official Title and Summary of Proposition 33 says that it "changes current law to allow insurance companies to set prices." It is also why the California Alliance for Retired Americans, the Older Women's League, Consumers Union (publisher of Consumer Reports) and three dozen newspaper editorials urge voters to Vote No on Proposition 33.

I now need my knee replaced. I won't be able to drive a car for months while I recover.  But if Proposition 33 passes, I will reluctantly pay hundreds of dollars for insurance I won't need. Why? Because if I drop my insurance while I'm off my feet I will end up paying much more when I reinstate my insurance and get back behind the wheel. And I will keep paying more for the next five years. With Prop 33, either way I lose. The only winners will be George Joseph and other insurance magnates who pocket our higher premiums.

Please join me in voting down the unfair Prop 33.

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SOURCE California Alliance for Retired Americans