What is it?

Proposition 33 is the auto insurance industry’s initiative statute that bases prices on the history of a driver’s insurance coverage.

It changes the current law and allows insurance companies to set prices based on whether the driver previously carried auto insurance coverage with any other insurance company.

It allows proportional discounts for drivers with some prior coverage as well as increased cost for drivers who don’t have continuous insurance coverage.

Pros/Cons

A vote on this measure means insurance companies could offer new customers a discount on automobile insurance premiums based on the number of years in the previous five years that the customer was insured.

A vote on this measure means insurers could continue to provide discounts to their long-term automobile insurance customers, but would continue to be prohibited from providing a discount to new customers switching from other insurers. We have yet to see conclusive evidence that a lack of continuous insurance coverage correlates with being a riskier driver. This makes Proposition 33 fundamentally unfair and impossible to support, opponents say.

Supporters of Proposition 33 say that Californians with car insurance earn a discount for following the law. But if you switch companies you lose the discount. Proposition 33 allows you the freedom to change insurance companies and keep your discount. Proposition 33 makes insurance companies compete, helps lower rates, and will insure more drivers.

People who are against Proposition 33 say that it is another deceptive insurance company trick. Insurance companies spent millions to pass a similar law in 2010—voters defeated it. Proposition 33 allows auto insurers to raise premiums on responsible drivers up to $1,000, unfairly punishing people who stopped driving for legitimate reasons. Consumer advocates oppose Proposition 33.

Terry McHale from the 2012 Auto Insurance Discount Act in Sacramento said, “A person should vote yes because if you follow the law you get a discount, so the consumer controls the discount. It also helps struggling people gets discounts for such things as being out of work. It helps people get insured and get insured at a lower price.”

Jaime Court of the Consumer Watchdog Campaign said “When was the last time an insurance company executive ever spent $16 million dollars on a proposition to save you money?”

Supporters/Opponents?

Proposition 33 supporters are members of the insurance industry while opponents include the California Democratic Party, Consumer Watchdog, several unions and many other consumer organizations.

Who’s funding it?

George Joseph, chair of Mercury General insurance company, has contributed more than $16 million to pass this proposition. The rest of the funding has come from other insurance companies.