January 20, 2012
By: Bruce Berry
A revised voter initiative related to California auto insurance rates that could give discounts to many drivers has now qualified for a spot on the state's November 2012 ballot. However, some consumers are speaking out against the proposal.
The 2012 Automobile Insurance Discount Act would give consumers a discount for maintaining continuous auto insurance coverage on their vehicle, even if they chose to switch companies. Current state regulations prevent insurers from looking at past coverage when determining rates.
"The present system is broken," said Mike D'Arelli, executive director of the American Agents Alliance, when the bill collected enough signatures to qualify. "It is ridiculous that the consumer loses the discount they have earned if they go to a new insurance company. We strongly believe that allowing the consumers to control their discount will create a more competitive and cost effective insurance market."
However, the Consumer Federation of California, along with other groups, has spoken out against the bill, saying it would penalize people who dropped insurance simply because they stopped driving a car.
The proposal is very similar to one proposed by Mercury Insurance which was defeated by voters in 2010 by two percentage points. Some changes to the old bill include extensions of the discount to military personnel and other consumers.
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