Mercury Insurance executive donates more funds to controversial legislative initiative
Mercury Insurance executive George Joseph has donated more money to a legislative initiative in California, the fate of which will be determined in November this year. The initiative is known as Proposition 33 and aims to provide more rate increase freedoms to the state’s auto insurance companies. Mercury Insurance has been one of the strongest advocates of the initiative, which has earned the company a fair amount of criticism for wanted to raise rates in an unjustified manner.
Prop 33 aims to gives insurers more power over rates
According to Proposition 33, auto insurance companies will be able to price insurance policies based on the coverage history of a driver. This means that if at any time in a consumer’s driving career they have gone without auto insurance coverage, the plans they receive from California companies could be extremely expensive. Mercury Insurance has invested some $16 million in the support of the legislative initiative.
Legislative initiative causing some turmoil amongst consumers
Proposition 33 has generated some controversy amongst Californian consumers. Many suggest that the initiative will cause a major increase in the price of auto insurance in the state. For those that have not had coverage for any reason, auto insurance prices could rise by a significant margin. Exactly how much more expensive policies will become is not yet known as the initiative will provide companies with the ability to determine the price of policies as they see fit.
Initiative may be a benefit for some, but could cause problem for others
On the other hand, those that have maintained auto insurance coverage for years are expected to see their policies become more affordable. This is because these drivers represent a relatively low financial risk, thus they are eligible for lower auto insurance rates. The problem many opponents of the measure have is that even good drivers without a history of accidents or traffic violations could see their rates rise if they even lost auto insurance coverage in the past.