Calif. Prop. 33 Defeated

Update: Californians Lump Props. 32 and 33; a Referendum on the ‘B’ Word

The second automobile insurance persistency initiative put to Californians in the last two years was defeated.

California’s Proposition 33, the 2012 Automobile Insurance Discount Act, was defeated with 54.6 percent voting against it, while it got 45.4 “yes” votes.

Proposition 17, a similar portable persistency discount initiative in 2010, lost by 2 percent.

Both propositions were backed largely by Mercury Insurance Chairman George Joseph, who said portable persistency would be good for consumers and create healthy competition among auto insurers. Joseph personally sunk more than $16 million into Prop. 33, and Prop. 17.

Both propositions were also opposed by Santa Monica, Calif.-based Consumer Watchdog, which waged a dogged war with Prop. 33 backers, brining discrimination, allegations of dishonesty and even international politics into the campaign.

Consumer Watchdog’s argument on Prop. 33 was it would unfairly punish drivers without prior insurance and would undermine existing consumer protections in California law, specifically Proposition 103, which Consumer Watchdog founder Harvey Rosenfield authored.

The Prop. 33 campaign’s argument was the initiative would promote competition among insurers, enable consumers to use their loyalty discount to shop for the best prices and it will protect members of the military serving overseas and those who lost their jobs due to the economy from losing their discount.

Many newspaper editorials came out against Prop. 33, but backers of the initiative successfully won over the support of myriad business and veterans groups.

Topics California