Written by
Nannette Miranda, ABC7
SACRAMENTO, CA - The 2012 Automobile Insurance Discount Act would allow California drivers to get a break in price for continuous coverage, even if they decide to switch companies.
In other words, your discount is portable.
State law currently prohibits insurance companies from looking at past coverage when quoting premiums.
"If this initiative passes, consumers own that discount," Campaign Consultant Rachel Hooper said. "It allows prices to be more competitive. It allows agents and brokers to be able to shop for better deals for California consumers."
Hooper said it's much like the cell industry when consumers couldn't move their phone number to a different carrier to take advantage of a better price. Now that it's allowed, she said rates are more competitive.
"This is not about discounts, this is about surcharges," Consumer Federation of California Richard Holober said.
Consumer Federation of California said the initiative isn't good for people who have been uninsured for a time, even if it's because they gave up their car. The cost of getting re-insured will jump.
It also points out coverage doesn't determine whether you're a good driver.
"Simply, the fact that you had a break in coverage in the last couple of years will be held against you and you will face surcharges of 40, 50 percent or more," Holober said.
Mercury Insurance spent $16 million to try to pass a similar initiative in 2010, but it failed.
This time, the measure includes changes to appease critics, and the billionaire CEO of Mercury personally donated more than $8 million dollars to the effort, not the company a move that government watchdog groups said may mean the campaign is trying to hide something.
"It looks like they are. It looks like they don't want voters to know its Mercury Insurance behind this measure," California Common Cause Derek Cressman said.
The campaign said those allegations are false, the CEO George Joseph is just trying to leave a legacy.
Nannette Miranda
ABC7
ABC7/KGO