No on Proposition 33

By Jill Pyeatt

Disclosure:  I do work for State Farm, which is the largest carrier of auto insurance in the state.  My company has taken a neutral stance on this Proposition.  As a consumer who happens to understand how insurance works, I’ve studied this proposition and reached a conclusion that Libertarians should vote NO. I actually don’t see what the big “prize” is here.  Auto insurance rates are very competitive in California; I guarantee you anyone reading this can call around and get quotes 20 % higher or more, and 20 % less or even less just by calling different companies.  This discount Prop 33 wants to force, what we call a “loyalty” discount, doesn’t represent that much of a discount.  The more important factors to figure a rate would be years of driving experience, driving record, amount of miles driven, and neighborhood the car is kept in.    The idea is to charge those who have been unable to carry auto insurance, except in the case of a few specified exceptions, more money.  Many of those people are from household experiencing financial difficulty, such as no employment, illness, etc.  Since they’ll be charged more to rejoin an auto insurance program, it will be harder for them and more people won’t be able to afford insurance.  I’m convinced we’ll have more uninsured people if this measure passes. We used to do this—charge a surcharge for previously uninsured people. Despite what the proposition said, rates were much higher overall back them.  A new mid-priced car for a good driver used to be around a hundred a month. Now the figure is much closer to $75 or $80.  I don’t think the current system should be tampered with. This measure is supposed to be “revenue-neutral”, meaning that rates will be adjusted up for some people so that rates for others can go down.  However, insurance companies’ actuarials will have to figure new rates, pay to submit them for approval at the Commissioner’s office, print new paperwork, re-program computer programs, etc.  OF COURSE everyone’s rates will go up because of it.  Duh!  That’s how business works!  I recommend NO on Proposition 33