Proposition 33, a California bailout measure that would have changed the state's regulations for auto insurance was denied on Tuesday night. The proposition was funded by Mercury General Co. Chairman George Joseph who put around $16 million of his own money to make sure the proposition was passed.
If passed, according to the official California voter guide, it would have changed the current law to "allow insurance companies to set prices based on whether the driver previously carried auto insurance with any insurance company. It also would have allowed proportional discount for drivers with some prior coverage and increased the overall cost for drivers without history of continuous coverage."
The legislation would have changed the initiative that regulated auto insurance in CA and banned insurers from offering different kinds of discounts and providing a special rate for previously insured drivers according to the The Los Angeles Times.
The Department of Insurance stated on Monday that auto insurers would have had to offer a new discount that would have charged higher rates to customers who didn't previous qualify for insurance as well. The proposition would have charged responsible drivers $1,000 who stop driving for legitimate reasons The Los Angeles Times.
A "YES" vote would have meant insurance companies could offer brand new discounts on auto insurance premiums based on the number of years in the previous five years that the car was insured.
Voting '"NO" on the measure meant that insurers could continue to provide discounts to long-term car insurance customers. It also means that companies would continue providing discounts to new customers who switch from other agencies.
People who were for the legislation argued that Californians currently with insurance would get a discount after the law was passed. It would have also allowed people the freedom to change companies and keep your discount. It would have lowered insurance rates and insured more drivers overall.
A similar proposition was determined in 1988 when Proposition 103 was passed and allowed auto insurance to cut premiums and tie rates together to the risks caused by specific drivers.
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