Prop 17 regulating vehicle insurance takes early lead

 

Proposition 17, which would allow insurance companies to reduce
or increase cost of insurance depending on whether a driver has a
history of continuous insurance coverage, is leading 55 percent to
45 percent in early counting Tuesday.
Proposition 17, which would allow insurance companies to reduce or increase cost of insurance depending on whether a driver has a history of continuous insurance coverage, is leading 55 percent to 45 percent in early counting Tuesday. With 17.1 percent of the votes tallied, 855,085 people cast yes votes compared to 701,381 who voted no.

If it passes, it will allow insurance companies in the state to give what are known as “persistency discounts” to new customers. “Persistency discounts” are discounts for those who have had continuous or nearly continuous auto insurance coverage.

Under current law in California, an insurance company can offer a persistency discount to its own customers, but under the terms of Proposition 103, auto insurers can’t offer that same discount to new customers who had continuous coverage for some period of time but from a different auto insurance company. Proposition 17 would give insurance companies the right to offer persistency discounts to customers of other insurers who have not let their policies lapse for more than 90 days in the previous five year period.

Mercury Insurance is Proposition 17’s primary sponsor. Through May 28, Mercury Insurance was responsible for about 98 percent of the funding for the “Yes on 17” campaign, having contributed $14.6 million.

California has 23.7 million licensed drivers who collectively pay billions of dollars in auto insurance premiums. Currently 80 percent of drivers maintain auto insurance and qualify for a persistency discount. About 20 percent of California’s drivers fall into the category of those who have had lapses in their insurance coverage to the extent that they would not be eligible for the persistency discounts allowed both under current law and Proposition 17.

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