Two decades on, the battle over California’s auto insurance coverage law rages on


The last two decades have seen ongoing battle amongst Harvey Rosenfield and George Joseph, the consumer advocate and the billionaire executive respective, over the auto insurance coverage laws that are covering the residents of California. The next faceoff in this battle is scheduled to take place in November this year over a ballot initiative. If this initiative gets the go ahead, it will reinstate the auto insurance laws in the state that were prevalent before the introduction of a provision in the year 1988. As per this law, the auto insurance providers will have the liberty of charging the drivers in the state depending on the type of coverage they have been opting for.  Termed Provision 33, this forms the crux of the auto insurance coverage law battle currently.

As per the terms of this provision, any person who has held auto insurance coverage continuously over the last five years without any breaks will be entitled to a discount called ‘continuous coverage discount’. They would be eligible for this discount, irrespective of whether they have been with the same auto insurance provider for the last five years or have changed providers during this period. The only qualifying criterion is that there should not have been any breakage between the coverage held.

While this seems to be an interesting proposition to many, it is facing opposition because it implies that people who did have even a small break between the coverage held, irrespective of the reason, should have to pay higher premiums to obtain their auto insurance coverage. A little over two years ago, a provision similar to Provision 33 had been drafted, but it was not approved and hence, did not see the light of the day. One of the main reasons for the proposal to be thwarted the last time around was that it impacted the military personnel to a significant extent. Those who had to be deployed overseas had to cancel their auto insurance policies before leaving to serve their country. This resulted in a coverage gap. As a result, they would not be eligible for the continuous coverage discount. However, Provision 33 has been amended to consider this aspect as well as make considerations to people who have lost their jobs over the last 18 months and therefore, could not afford an auto insurance policy.