Controversial Car Insurance Ballot Irks Consumers


A highly controversial ballot supported by a car insurance mogul is rousing the anger of a consumer advocacy group in the state of California.

Controversial Car Insurance Ballot Irks ConsumersThe proposal in question would legalize surcharges for hundreds of thousands of car owners in California. The same ballot measure would also penalize drivers who get into accidents, even if they are not held at fault.

According to Consumer Watchdog, a consumer advocacy organization, the ballot proposal can ultimately lead to more uninsured motorists in California. The group called the proposal a declaration of war on the state’s drivers. They also claim that George Joseph, the chairman of a well-known insurance firm in the state, is the foremost supporter of the ballot measure.

The proposal, if passed, would mean that Californians who have stopped driving for three months or more could face hefty premiums when they apply for new insurance. Even previously uninsured motorists could see similar rates if they decide to avail of insurance.

Consumer Watchdog insists that the proposed changes would mean more problems for laid-off workers, fresh graduates, and retirees returning to work. First time insurance buyers can also expect higher than usual insurance expenses. Even drivers who moved away from cities with excellent public transportation systems can suffer high premiums under the proposal.

At present, surcharges targeting certain groups of people are illegal. Proposition 103, the 1988 insurance reform law, prohibits unauthorized surcharges considered unfair to many car owners. The consumer group says that Joseph’s company has repeatedly violated that law and similar state insurance laws.

Harvey Rosenfield, the author of Proposition 103, believes that the new proposal would adversely affect middle and working class citizens. The higher insurance costs and unjust surcharges would mean more families struggling under the poor economy, he says. Rosenfield is also the founder of Consumer Watchdog. He also points out that Californians who choose to patronize public transportation for a short period can expect more expensive insurance if they decide to use their vehicles again.

Consumer Watchdog has also expressed concern that the new proposition could lead to more uninsured Californians. The Insurance Information Institute has recently said that the number of uninsured motorists in the state can balloon to more than 20 percent with the continuing economic recession.

Industry experts say that more uninsured drivers can mean higher premiums for everyone. They explain that because there is a higher probability of getting in an accident with uninsured motorists, insurance companies will have to charge their clients more to cover additional liabilities.