February 3rd, 2010
SANTA MONICA, Calif., Feb. 1 /PRNewswire-USNewswire/ — California Secretary of State Debra Bowen has announced that the ballot initiative fully funded by Mercury Insurance to jack up Californians’ auto insurance premiums has been assigned Proposition 17 for the June 8 ballot. Proposition 17 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 proposal, people who stopped driving and didn’t need insurance for a time would be required to pay hundreds of dollars more for insurance when they sought to restart coverage. Prop. 17 would also allow insurers to charge significantly higher premiums to people who missed just one insurance payment.
The measure would gut a provision of the 1988 insurance reform measure Proposition 103, which prohibits companies from raising rates on people because they did not have auto insurance in the past.
“Don’t be fooled by Proposition 17 and the multi-million dollar campaign funded by Mercury Insurance,” said Harvey Rosenfield, author of Proposition 103. “Prop 17 is an insurance company attack on families, soldiers and seniors who are already struggling in a tough economy. Voters should know that Prop 17 will raise insurance premiums.”
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February 3rd, 2010
SACRAMENTO “” Mercury Insurance’s whopping surcharges to motorists who’ve had a lapse in their coverage in other states is “smoking gun” proof that Californian motorists will face the same hit to their wallets if voters approve a ballot measure underwritten by Mercury, a consumer advocate charged Wednesday.
In a video demonstration using Mercury’s Web site, www.MercuryInsurance.com, which offers insurance quotes, Harvey Rosenfield, the founder of Consumer Watchdog, showed that a typical middle aged man with a modest car in Nevada would be charged $835 for six months if he answered yes to the question of whether he currently had coverage. If that same motorist answered no, the six-month premium was quoted as $1,448 — a 73 percent markup, or surcharge. In California, that is illegal.
Similar or higher surcharges by Mercury have been found in Texas (67 percent) and Florida (227 percent), said Rosenfield, the author of Proposition 103, the 1988 voter-approved law that prohibits insurance companies from raising rates based on previous coverage.
“This shows that Mercury has been lying to the public, telling its customers, reporters and the attorney general’s office that this is not going to raise anybody’s rates, and that’s a lie, ” Rosenfield said. “The last thing we need now in an economy in which people are struggling to pay
Advertisement their bills is an insurance company swindling a few hundred dollars a year out of our own pockets.”
A controversial title and summary — written by Attorney General Jerry Brown — says the ballot measure would allow drivers to change insurance carriers but still be eligible for discounts if they can show they have not had any lapses to their coverage. It says nothing about surcharges, an omission that Rosenfeld has criticized.
Rosenfield said the primary impact of the measure would be to increase the number of uninsured motorists by making it too expensive for those who can’t afford to pay the higher rates for failing to have continuous coverage. That, in turn, would lead to higher premiums for everyone else.
A spokeswoman for the ballot measure campaign, Californians for Fair Auto Insurance Rates, dismissed the accusations, saying there is no comparison between other states and California, which she said will continue to be protected by Proposition 103.
“Opponents’ objection to a measure that will benefit more than 80 percent of California consumers is baffling and unequivocally anti-consumer, ” said Kathy Fairbanks. “And attempts to compare our California-specific measure to a fictional example in Nevada is a misleading and lame attempt to make a connection where none exists.”
California’s regulatory and rate-setting environment is nothing like Nevada’s or any other state’s, Fairbanks added. Unlike Nevada, she said, the top three factors California law that determine premiums, she said, are driving safety record, miles driven annually and years of driving experience.
The ballot measure is backed solely by the Mercury General Corp., the state’s third largest auto insurer, which has given $3.5 million to the campaign so far to cover the cost of petition gathering efforts.
The campaign, Californians for Fair Auto Insurance Rates, argues that the vast majority of California drivers maintain insurance and should be rewarded for keeping their insurance current. Extending the discount, they say, will bring California up to speed with the vast majority of other states that already offer it.
Rosenfield said bringing it in line with other states only means pulling California back to the pre-Proposition 103 years.
“The whole idea of 103 was to get out of line with other states, ” Rosenfield said, “where the legislatures were beholden to the insurance industry and insurance laws were so weak they only protected the profits of greedy companies like Mercury.”
Mercury has come under fire from state regulators, who are in the midst of pressing for sanctions against the company for a series of alleged violations. In determining what level of punishment should be meted out to Mercury in an enforcement action before an Administrative Law judge, a Department of Insurance attorney berated Mercury for its “lengthy history of serious misconduct, and its attitude — contempt toward and/or abuse of its customers, the Commissioner, its competition, and the Superior Court.”
The campaign turned in more than 700,000 signatures to county registrars in December, and is expecting it to qualify for the ballot soon.
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February 3rd, 2010
The national median car insurance rate for a six-month policy is currently $702 according to InsWeb, a leading online insurance comparison provider. This rate has decreased approximately 0.5 percent over the last six months.
InsWeb also released national median rate data for specific demographic groups including men, women, and age groups ranging from teenagers to seniors. The company currently reports that women pay a median car insurance rate that is about 5 percent lower than men, or $683 compared to $720 for a six-month policy. Additionally, drivers age 19 and younger pay the highest median rate — nearly $1,300. That is more than double that of the group with the lowest reported median rate, those ages 60 to74, who pay a median rate of $596.
“While much of what determines a driver’s auto insurance rate is beyond his or her control, many are still paying more than they have to,” said Brad Cooper, Senior Vice President at InsWeb. “By being proactive and following a few simple tips, most of those drivers can reduce their car insurance costs by at least 5 or 10 percent.”
Consumers who pay more than the national median rate should review the following car insurance savings tips from the experts at InsWeb:
1) Take Advantage of Discounts: Many consumers are eligible for good
driver, loyalty, good student, safe vehicle and other types of
discounts but don’t take advantage of them. A simple call to your
insurer can yield quick savings.
2) Increase Your Deductible: Simply put, a higher deductible equals a
lower rate. You’ll face higher out of pocket costs should you get into
an accident, but the savings may well be worth it.
3) Insure Your Car and Your Home with the Same Carrier: By choosing a
multi-line insurance policy, you can save significantly on both your
auto and home policies.
4) Pay Your Policy in a Lump Sum: Many insurers charge a convenience fee
to break up insurance premiums into monthly payments. If you can
afford it, pay your premium in one lump sum and save $50 a year or
more.
5) Shop Around and Compare Rates Regularly: Because your circumstances
change all the time, so will the way insurers view your risk profile.
Additionally, different insurers often specialize in different types
of drivers, so it pays to shop around and compare rates at least once
a year.
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February 3rd, 2010
Commuter: I just read your response to the question regarding the need to identify passengers in vehicles after a collision in which there are no (apparent) injuries. I respectfully disagree that it is not necessary to identify passengers in both vehicles.
There is a popular insurance scam whereby a driver in such a collision later claims lots of passengers were in the vehicle and have injuries. The driver gets friends to claim they were in the vehicle, and there is no documentation otherwise. Second, there are scams in which passengers later claim injuries.
I would get names and descriptions of all passengers, and if there are no passengers, put that in a statement to the insurance company. I also would take pictures of the car with the positions of any passengers.
P, Richmond
Queen: Thanks for pointing this out, P. The scams you described are very real. While there is no legal mandate to get passenger photos and information, you’re right, it’s a good idea. You don’t even need a disposable camera; your cell phone will do.
While we’re on the subject, another type of auto insurance fraud is “swoop and squat,” when someone pulls in front of you and brakes abruptly in hopes that you’ll rear-end them so they can make an insurance claim. Another reason to stay alert and keep a cushion of space between you and the car ahead of you. Finally, if you get in a fender bender at night, Tully Lehman, a spokesman for the Insurance Information Network of California, recommends driving to a well-lighted, safe place before getting out of the car to exchange information.
Commuter: I read the article in the Contra Costa Times about the $1.5 million settlement between BART and the family of Oscar Grant. Where does this money come from? Is it paid from fares paid by riders or does BART have insurance to cover this?
Ernie Furtado, Lafayette
Queen: As most readers already know, on Jan. 1, 2009, a then-BART police officer shot an unarmed rider, Oscar Grant III, to death. BART reached an agreement with the mother of Grant’s daughter Jan. 27, agreeing to pay $1.5 million in a settlement stemming from a $50 million lawsuit filed against the agency after the shooting.
The $1.5 million will come from BART’s liability reserve fund, which is funded by tax dollars, fare dollars, revenue from those ads you see on BART trains and in stations, property taxes and other sources. BART’s insurance department oversees this fund. While the agreement closes part of the lawsuit, co-plaintiff Wanda Johnson, Grant’s mother, did not settle.
Commuter: I bet this is a new one for you. The car ahead of me on Interstate 580 in Livermore was behaving a little erratically — speed changes mostly. Turns out the driver was playing a guitar lying across his lap. At least that placed his hands near the wheel. And no sheet music was visible so he could keep his eye on the road, at least as long as he didn’t have to generate a new difficult chord.
I haven’t seen in any of the proposed distracted-diving legislation any mention of musical instruments. This one surely isn’t a hands-free device!
Will, Livermore
Queen: Wow, that takes the cake, Will. Readers, don’t hesitate to send in stories of bizarre distracted driving you glimpse on the road, and the Queen will share them.
Categories: Auto Insurance |
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February 3rd, 2010
SANTA MONICA, Calif., Feb. 2 /PRNewswire-USNewswire/ — Proposition 17, the Mercury Insurance ballot initiative, will allow insurance companies to raise premiums for many drivers in California, according to the Department of Insurance’s official analysis released last night. Mercury has insisted that its initiative will only reduce premiums and denied that it would increase premiums.
“[I]f an insurer offers a continuous coverage discount for some drivers it will result in a surcharge for other drivers. This is because automobile insurance discounts and surcharges must offset one another so that each rating factor applied by an insurer is evenly balanced within the insurer’s rating plan.” [Emphasis added.]
The Department’s action comes as Attorney General Jerry Brown prepares the final Title and Summary of the Mercury Insurance initiative for inclusion in the ballot pamphlet and other voter materials. The Attorney General must submit his final Title and Summary to the Secretary of State on Friday February 5.
“Insurance Commissioner Poizner has provided the Attorney General with the definitive analysis he needs to accurately summarize the Mercury Insurance initiative and the price hikes that will be allowed if it passes,” said consumer advocate Harvey Rosenfield, who authored the 1988 insurance reform measure Proposition 103.
“Voters rely on the Attorney General for independent analysis of initiatives. That’s especially true in a case like Prop. 17, which is funded by a single corporation that has endless money to confuse voters with misinformation.”
Prop. 17 would legalize surcharges by Mercury and other insurance companies that are now illegal under California law – Proposition 103, approved by the voters in 1988. That measure, which has saved California motorists over $63 billion, bars insurance companies from considering a driver’s coverage history when a motorist applies for insurance.
The Mercury initiative would lead to surcharges of between 40-227% for soldiers, seniors, students, the unemployed who did not have insurance – even if they did not own a car – or who were forced to drop coverage for financial or personal reasons and then tried to restart coverage. In the words of the Department of Insurance, Prop. 17 would allow insurers “to do something that under current law they cannot do.”
The Department of Insurance has long sought to enforce Proposition 103′s ban on the consideration of prior insurance against Mercury. When Mercury was caught violating the law in the late 1990s, the agency issued a regulation directing Mercury to stop. When Mercury was sued in civil court for hundreds of millions of dollars in illegal surcharges, the Department weighed in. And when Mercury got the legislature to pass, and Governor Gray Davis to sign, a law nearly identical to Mercury’s initiative, the courts relied on the Department’s expertise when it invalidated Mercury’s law, noting that it would raise people’s premiums in violation of the law.
Until the courts ordered Mercury Insurance to stop in 2005, however, the company illegally forced a surcharge on hundreds of thousands of its customers who had had a break in insurance coverage in the previous five years.
“Of course Mercury wants to legalize premium hikes it was forced to stop five years ago. But voters can prevent that by voting no on Prop. 17,” said Rosenfield.
The Campaign for Consumer Rights, a nonpartisan, nonprofit organization is working with consumer groups, seniors, unions and soldiers to oppose Mercury’s deceptive initiative. The Campaign for Consumer Rights is the campaign affiliate of the nonpartisan, nonprofit Consumer Watchdog.
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