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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