Mercury Insurance Launches Attack On Middle Class With Initiative To Raise Rates For Drivers Who Don't Cause Accidents
Every major economic downtown has its Scrooge, the opportunistic capitalist who preys on working people when they are hurting the worst. 
A ballot measure cleared for circulation by California Attorney General Jerry Brown moves Mercury Insurance CEO and founder George Joseph high up on the list of America's Top Corporate Predators.
Brown has released the official title and summary of the proposed Mercury Insurance ballot initiative that will allow insurance companies to raise rates when motorists who stopped driving for a time restart their coverage; when they file a claim, even if an accident is not their fault; or when they are late on a payment.
The anti-consumer measure is sponsored by auto insurance giant Mercury Insurance and its billionaire Chairman George Joseph, who over the years has funded numerous attempts to undermine Proposition 103, the voter-approved measure that bans unfair rate increases. Joseph has been been listed as among the top 400 richest men in the world, but I suppose you can never be too rich when there's opportunity to hit the middle class where it hurts in the name of profit.
Under state law, the Attorney General is responsible for analyzing a proposed ballot initiative and issuing a title and summary that will now appear on petitions presented to Californians by signature-gatherers for their approval. The Attorney General's full title and summary reads:
ALLOWS INSURANCE COMPANIES TO INCREASE OR DECREASE THE COST OF AUTO INSURANCE BASED ON A DRIVER’S COVERAGE HISTORY. INITIATIVE STATUTE. Allows insurance companies to raise the cost of auto insurance based on the absence of prior automobile insurance coverage. Allows insurance companies to lower the cost of auto insurance for drivers who have continuously maintained auto insurance coverage, even if they change insurance companies. Allows insurance companies to consider “claims experience” when calculating the amount of any such reduction or when determining which drivers will be eligible for it. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local governments: The measure would have no significant fiscal impact on state and local governments. (09-0021.)
The initiative would penalize people who miss one payment or decide not to drive and let their insurance lapse. It would also allow insurance companies to penalize drivers simply because they file a claim, even if they are not at fault such as when they're at rear-ended while waiting at a stoplight. Currently, only accidents where the driver is at-fault can be used to increase his or her premium.
"Mercury is using the initiative process to go after middle class Californians by allowing insurance companies to raise rates on struggling families in the middle of an economic crisis," said Consumer Watchdog's Executive Director Doug Heller. "Auto insurers shouldn't be allowed to jack up your premium because you stop driving for a time, miss one payment or file a legitimate insurance claim when you are hit in an accident.
Hidden in the deceptive initiative is Mercury's plan to create an unfair "use it and lose it " system, which would raise driver's rates if they ever file a claim. This creates a perverse incentive to not file accident claims, even when you are not at fault, in order to avoid a major rate hike. People who pay for coverage should not be penalized for using their policy. It also means accidents are less likely to be reported, a public safety hazard. Most importantly, for Mercury, it means that insurance companies will have to pay fewer claims. That is why Mercury, the only donor to this effort, has already contributed $500,000 to the campaign.
"It's pretty easy to figure out what's going on here. An insurance giant and its billionaire chairman are going to spend millions on political consultants and signature gatherers to try to fool Californians. Mercury will say and spend anything to win new ways to charge higher premiums and pay fewer claims," said Heller.
Because the number of Americans letting auto insurance lapse during this economic crisis is skyrocketing, according to insurance industry data, Mercury's proposed penalty for restarting insurance coverage will also force many drivers to remain uninsured. This will raise the cost of uninsured motorist coverage for everyone else and leave California roads much less safe.
"Mercury's proposal is a triple threat. You will pay an insurance penalty if you ever have a lapse in coverage; you will pay a penalty if you ever file any kind of claim; and you will pay higher uninsured motorist premiums. That might be good for Mercury, but it’s no good for the rest of us,” said Heller.
Consumer Watchdog sent Mercury's George Joseph a letter about his dangerous attack on California families when the initiative was first filed. Click here to read the letter.
Consumer Watchdog has yet to receive a response. Shame on Joseph and Mercury. This is one company that the public simply cannot trust.
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We have this sort of system in Alberta Canada. It is ridiculous.
People pay each other cash, rather than file a claim, even when not at fault.
I was a city bus driver with a good driving record for 10 years in another province. I sold my car and then moved to Alberta. I did not get a car insured for about 6 months. I was charged as a new driver. The highest rates.
It is against the law to drive without insurance. So we pay for insurance that is too costly to ever use. This is what will happen to you. It is in my opinion a criminal collusion of the insurance lobby and government.
This doesn't sound like someone without insurance will receive a surcharge, but rather someone with continuous insurance will get a discount. All the major insurers give a renewal discount to their customers now. Do you call and reject your renewal discount because not everyone gets one. I doubt it. This allows someone to take their renewal discount with them when they change companies. That is the only difference. This is a positive move for the middle class and responsible people. Oh yeah, we live in California, we only reward the irresponsible people. Think about it!
California a a lot more restrictive than most states on coverage, NJ is bad too, too much fraud itnhe past there.
but california does not allow insurers to use credit history etc to set rates, if i remember correctly that past insurance is not allowed,
now I am not saying the proposal is good or bad, though i am wary of the whole raise or lower rates, Insurance co's almost never lower rates.................
Insurance companies always raise rates for reasons unrelated to the policy and their actual costs.
Insurance companies decide to raise rates based on credit ratings, which has nothing to do with your driving record. Not only that, their credit rating is secret and you can't get a copy of it. Not only do they do it on auto insurance, but they do it on home insurance as well.
About 15 years ago, I had a couple of speeding tickets. Of course, my insurer jacked up the rates by 25%, even though they had incurred no loss. About 10 years ago, an at-fault driver lost control of her car in the snow and totaled mine and her cars, causing thousands of dollars in damage. She was able to get "accident forgiveness" and keep the same insurance rate, in spite of costing her insurance company two cars.
Insurance companies are nothing but scammers. They always find more ways to raise your rates, but when it comes to claims, they always find ways not to pay you.
So you gave an example of great insurance company giving forgiveness, then twice generalized all of them by saying they're "nothing but scammers"?
Ever looked at the likelihood increase that speeders have to have an accident and to be at fault in an accident? It's exponential. If you're going to whine about insurers taking adequate rate for poor drivers, save your breath and quit speeding.
So what? What is a more realistic cost to an insurance company, what they have paid out in claims or is it some imagined possiblity that they might cost them something somewhere down the line. The insurers forgive you when you destroy your car negligently, but charge you when it doesn't cost them anything.
All of the insurers likelihoods are no more accurate than a guess. Just because there is a slight tendency for something to happen doesn't make it very likely. What does a credit report have to do with anyone's past driving record? I guess I can just as easily make the relationship that highly paid people cost more in insurance claims because they have the most expensive cars, so they should be charged far more.
Yes I really agree with that!
Todd DiRoberto
http://www.merchantcircle.com/business/American.Satellite.Inc.presented.by.Todd.DiRoberto.and.Caleb.Wickman.866-512-4714
I hate to tell you this but the insurance companies already do all the above. They just want it made legal. O course it should not be made legal, but what worries me is that they have been doing it for years anyways and they have gotten away with it. We should also work on enforcing existing rules and laws as well.
It's Mr Court that can't be trusted. If he has even a basic clue about the issue then he's intentionally misrepresenting what this is about. Mercury had a system for rewarding responsible behavior for many years that they were forced to dismantle. This is an attempt to get it back. The reduced rates that people earned were never taken away for filing a single claim or even for lapsing coverage for a short time. Insurance companies are allowed to discount your premium if you've had continuous coverage, but only with them. Mercury wants to be able to apply the discount if you've had continuous coverage with someone else. That's what this is about. Mr Court doesn't want people to be rewarded for responsible behavior. Write an honest article Mr Court.
Maybe I missed out on the memo where insurance companies re-interpreted the whole idea of insurance and now only accept the risks that they take investing consumer's premiums in questionable ventures created by their cohorts in the financial sector. It seems that they have become adverse to even the mildest forms of risk related to their customers. The word carpetbagger (of the snake oil-iest sort) comes to mind.
which is the reason I say no to mandates for health insurance... it's a law you have to have auto coverage.. but no law to be fair or honerable to the insurors... auto coverage should be provided via a tax on license plates or gasoline... that would provide your basic liability. additional coverage could be purchased.
The difference with health insurance is that Republicans have their fingers in that pie. It would in effect, cut them out if it. For 8 years they had the votes and a crook / quack of the worst sort named Bill Frist up there to take everthing he could to further his family business. You may not use your auto insurance (make a claim) in a years time, that's when the premium you paid should roll over and continue to do so. Sort of a one time payment protection plan that will give you the incentive to drive carefully. However, you are supposed to visit your doctor at least twice a year for a check up and most people, women in particular, go more. We have to a society in keeping with the strides we make in science and medicine. I can assure you one killer epidemic like, oh, say INFLUENZA
strikes indiscriminately.
Insurance companies. You gotta love'em. They can screw the poor and middle class a thousand different ways. And we just let'em.
What is the point of having insurance?
I have had Mercury insurance for several years now and so far they have been very good. In the past Allstate screwed me, (raised my rates when I hit a certain age) and GMAC really really screwed me (dropped my coverage instantly when my oldest daughter was put on our plan) If Mercury does start to use these tactics I will shop for less expensive car insurance. There are enough of them out there to choose from, and they are always touting low rates.
Free market at its best, auto insurance companies. Don't you wish there were as many competitive options out there for health insurance? Health insurance companies spending $$$$ on advertising and competing to give you the lowest rate?
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