Debates Raging Over Proposed Auto Insurance Law in California


Even before the controversial Continuous Coverage Auto Insurance Discount Act goes into ballot on June 8, debates among proponents of the law and those against it have already ensued to obtain popular opinion among California residents.

Debates Raging Over Proposed Auto Insurance Law in CaliforniaConsumer Watchdog, a non-profit group which advocates consumer and taxpayer interests, disclosed that voters may be fooled by the real purpose of the proposed statute. It even prompted Harvey Rosenfield, founder of the group, to state that the new legislation is fraudulent and full of deception.

The main contention of Consumer Watchdog is that the initiative is nothing but an attempt to hike insurance costs. Rosenfield said that even with just questioning and calling to ask for coverage rules, rates could go up under the proposed initiative.

Rosenfield also explained that on the instance of a vehicular mishap, even the motorist who is not at fault could also be penalized. Add to this, if a consumer had failed to pay premiums or have lapses in payment, penalties would be allowed to be charged against said consumer. This provision, in turn, would also affect members of the military assigned abroad who could not make payments on time because of the distance.

Rosenfield even contends that amidst the gathering of campaign signatures, “paid signature gatherers” would roam supermarkets and other public places to “confuse” voters into approving the initiative. Said signature gatherers, according to him, receive 75 cents to a dollar for every signature of approval.

As to the real proponent, he said that the real sponsor is the auto insurance company Mercury Insurance. Even if the proposed law is signed by Christina Wilson, he contends that the real person behind the move is George Joseph, chairman of Mercury Insurance.

But Kathy Fairbanks of Californians for Fair Auto Insurance Rates contends that the statement of Rosenfield is misleading. She argued that the Continuous Coverage Auto Insurance Discount Act would permit drivers to maintain continuous coverage even if they change or decide to switch insurers. Although she admits that Mercury Insurance is indeed the sole financial contributor, she expects other businesses and consumer groups to financially support said move.

When asked to comment, Insurance Commissioner Steve Poizner said that although it is worth the effort to be skeptical of insurance company-backed initiatives, his department would have to finish analysis on the situation first before taking a stand. He continued that he might just inform the voters of the findings or he might “weigh in or not” his opinion in the hotly contested debate.

In the end, the final say would rely on the residents of California. Their votes would finally decide on the merit of said proposed law.