Thursday, April 29, 2010




It’s never hard to find self-serving propositions on the California ballot. But even in a time that sees Pacific Gas & Electric Co. sponsoring a measure to force cities to get a two-thirds popular vote before they can set up or expand a public electric utility, a measure sponsored by Mercury Insurance takes this year’s prize for sheer gall.

Mercury, of course, maintains it did most California drivers a big favor by spending more than $1 million to qualify its initiative for the June ballot, where it will appear as Proposition 17.

“Our measure rewards responsible drivers,” initiative spokeswoman Kathy Fairbanks insists. The definition of a responsible driver? Anyone who maintains constant car insurance coverage for years, never letting it lapse. By this definition, a college student on a campus where cars are impractical is irresponsible when he or she lets a policy lapse. Soldiers deployed to other states and countries for a year or two are also irresponsible for not continuing to pay premiums on car insurance policies that do them no good.

These are just two categories of drivers who would have to pay extra-high premiums under Mercury’s measure, which claims to offer discounts for drivers who maintain constant coverage year after year.

That would include about 82 percent of California’s drivers. It’s difficult to understand how any price that’s applied to more than four out of five affected customers can be called a discount. A price that’s so commonly applied is actually a regular price. And, in fact, that’s how the 1988 Proposition 103 insurance rate rollback initiative treats things.

Meanwhile, those who let their insurance lapse – no matter how sensible or responsible the reason – will pay through the nose if this measure passes.

Lawyer Harvey Rosenfield, who wrote Proposition 103 and founded the Consumer Watchdog advocacy group, has videotaped a test case where he filled out insurance applications via computer, pretending to be a Nevada resident applying for Mercury coverage under that state’s laws, which allow a penalty for letting insurance lapse.

Listing qualifications identical in every way except that one “applicant” had allowed his insurance policy to expire, Rosenfield found the rate 73 percent higher.

“Comparing California to Nevada is like comparing apples to oranges,” responded Fairbanks, without indicating how it’s different to apply for insurance in Nevada than in California. One difference, of course, is that companies operating in California now must base their prices mostly on a driver’s record, and not on how often or how long that driver has had insurance.

Rosenfield calls the Mercury proposal a “swindle” that could cost motorists buying new policies hundreds of dollars a year more than the the same coverage costs someone who has kept his or her policy going continuously.

Mercury claims its measure will benefit many thousands of motorists because today’s no-lapse “discount” only applies if drivers stay with the same company. Drivers who do that often qualify for other, actual discounts, so most stay put once they make a choice. Proposition 17 would let the same rates apply when drivers switch companies. Plainly, Mercury plans an aggressive campaign to woo other companies' customers if its initiative passes.

Proposition 17, thus, stands in the tradition of deceptive measures put forward from time to time by companies and industries trying to feather their own nests.

Another was a tobacco industry push for an end to local smoking regulations. Just two years ago, Texas energy executive T. Boone Pickens – chief funder of the scurrilous Swift Boat ads that many believe killed the 2004 presidential candidacy of multiple military medal winner John Kerry – spent more than $5 million pushing a measure that called for California to issue $5 billion in bonds that would have been spent primarily for cars running on compressed natural gas, a commodity produced in large quantities by a Pickens company.

Voters usually see through these kinds of self-serving measures, but not always.

The question this time is whether voters will recognize that Mercury’s measure will cost them hundreds of dollars anytime their car insurance lapses, whether intentional or not. One thing for sure: Mercury will continue to outspend its opponents by plenty, viewing every nickel it puts into the campaign as an investment.

Email Thomas Elias at His book, "The Burzynski Breakthrough," is now available in a soft cover fourth edition. For more Elias columns, visit

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