Sacramento -- Proposition 33 would allow insurance companies
to offer the same loyalty discounts to new customers as they were receiving
from their previous insurer. The problem, critics say, is this may lead to a
rate increase for other customers.
The proposition is backed mostly with money from George
Joseph, the chairman of Mercury Insurance, California's fourth-largest
insurer. Joseph would like to use
the discount incentive to bring in new customers.
Opponents say that while it would provide discounts for some
drivers it would also lead to increased rates for drivers who haven't had
continuous coverage in the past.
The executive director of American Agents Alliance, the measure's
sponsor, says talk of rates going up is just fear mongering. He says rates
didn't increase for uninsured drivers when a law similar to proposition 33 was
in effect in the late 19-90's.
The latest poll from the California Business Roundtable
shows the proposition leading thirty-seven percent to thirty-five percent with
more than a quarter of voters undecided.
