California auto insurance law is being challenged by Mercury General Corp

California Auto InsuranceMercury General Corp., one of California’s largest auto insurance providers, has taken a bold new step in confronting one of California’s most controversial auto insurance laws. Proposition 103, as it is known, was first passed in 1989, much to the chagrin of many insurance companies offering automobile policies. The law brought many changes to the industry, among which were new regulations regarding rates and limiting the power of insurers to deny claims. For the past decade, Mercury General has been campaigning to change the law. As California’s Legislative session nears its end, the company is investing heavily into a new initiative that could succeed where past efforts have failed.

George Joseph, chairmen of Mercury General, has allotted $8 million to a new proposition called the 2012 Auto Insurance Discount Act. The proposition would allow insurers to offer discounts to certain groups of motorists while raising the rates of others. The criteria used to determine which drivers deserve the discounts and which deserve to pay higher premiums is based on whether drivers have had continuous insurance coverage over the past five years.

Joseph claims that making this change to the law will help insurers compete with one another, which could drive down rates as a whole. Opponents, led by Consumer Watchdog, an activist group based in Santa Monica, California, insist that such changes will enable insurers to discriminate against consumers who had lost access to insurance coverage in the past.

The measure has yet to obtain the appropriate number of signatures from registered voters to win a place on the June ballot.

Related posts

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.