30 October 2012

Voting on car insurance rates again? Yes, again.

Getting behind on the proposition rants… Other stuff’s been distracting me. Prop 33 is kind of a no-brainer, though.

Proposition 33. Auto Insurance Companies. Prices Based on Driver’s History of Insurance Coverage. Initiative Statute.

What I’d call it. If you don’t have auto insurance, man, are you gonna get shafted by your introductory rate.

The “problem” and “solution.” Well, for most of us it’s not a problem: When we passed Prop 103 in 1988, it determined how the Insurance Commissioner approves auto insurance rates. Mostly it’s based on the driver’s safety record. To a lesser degree, it’s based on how often you drive, or how long you’ve been driving. That sets the baseline rate.

Insurance companies can then offer discounts to their existing customers for being good drivers. But they can’t offer those discounts to attract new customers from other insurers. Well, Prop 33 fixes that: Now they can.

Here’s the catch. If you’ve not been driving for 90 days, or are a new driver, or are new to California, or were covered under someone else’s plan but didn’t have your own plan, you’re gonna get hosed.

Two years ago, Prop 17 tried to do the same thing. Like Prop 33, it was largely written by, and sponsored by, George Joseph, chairman of Mercury Insurance. It lost, 2.8 million to 2.5 million votes. We’ll see whether history repeats itself.

If it doesn’t pass: Nothing changes.

Argument pro. You deserve a reward for following the law and having car insurance. This’ll give you better insurance rates. You earned it. Vote for yourself.

Rebuttal. Seriously, when’s the last time a billionaire insurance company owner tried to change the law to save you money? Doesn’t happen. It’s a scam. Your rates will go up.

Argument con. It’s a cleverly worded scam to deregulate the insurance industry, penalize responsible drivers, encourage people to not buy insurance, and we already voted “no” on this in 2010.

Rebuttal. Those are ugly, scare-tactic accusations. George Joseph is a saint. Veterans back this proposition. God bless America.

My view. I don’t own a car, so it doesn’t affect me directly. Indirectly, of course, it’ll drive up rates for all the kids, for all the Air Force personnel who move off the base (yeah, it claims military service is an exception, but let’s not forget the family members who aren’t in the service), and for anyone who moves here.

I’m not a fan of deregulation in general. The reason we regulated things in the first place was because big business was getting abusive, and it was an uphill fight to pass these laws in the first place. The claim that if you drop the requirements, they’ll behave themselves on their own, runs totally contrary to human nature: Legalize misbehavior, and more people will misbehave. Look at what happened after we legalized marijuana.

I’m pretty sure we voted correctly in 2010, so I’m still voting no.