California insurance Prop 33 has been rejected by judge

California's State Capital Building in Sacramento
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California's State Capital Building in Sacramento

The ruling was laid down in the Sacramento Superior Court.

Judge Timothy Frawley from the Sacramento Superior Court has rejected in full arguments in a California insurance industry lawsuit that was filed in support of Proposition 33, upholding the Ballot Label of the Attorney General, which states that it “changes law to allow auto insurance companies to set prices based on a driver’s history of insurance coverage.”

All of the consumer advocate pamphlet statements that had been made against Prop 33 were also upheld.

Among those upheld by Frawly included the statement that the initiative would cause the California insurance industry to become deregulated, leading good drivers to have to pay increased premiums.

Ninety nine percent of California insurance Proposition 33 is funded by George Joseph.

Two years ago, Joseph’s company, Mercury Insurance, sponsored Proposition 17, which was an initiative that was almost the same as this most recent one. Voters rejected it at that time, regardless of Mercury’s $16 million in spending on its campaign.

Consumer and senior advocates’ lawyers who had created the arguments against the most recent Proposition have stated that the court was mislead by Mercury, which did not address the fact that the ballot initiative would repeal a protection for civil rights which was voted into place in 1988 to stop redlining.

Consumer advocates have said that Proposition 33 will lead to California insurance premiums increases even for drivers who have spotless driving records, simply because they have not been driving and have therefore justifiably allowed their coverage to lapse. Reasons for allowing the policy to lapse could include serious illness, unemployment over long-term, the use of public transit, or returning to school, and yet drivers will be penalized with higher premiums as a result.

The initiative is meant to allow an individual’s California insurance coverage history to be used by insurers as an element that is considered in calculating his or her premiums. If this measure is passed, it will make a significant difference to the shape of the industry in the state, as it will change regulations that have been in place for decades.

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