Proposition 33 is a ballot initiative asking California voters to approve a new discount for drivers who have maintained consistent auto insurance coverage for at least five years. The so-called persistency discount would be given on a proportional basis, meaning the longer the driver has been insured, the higher the discount.

In 1988, Proposition 103 was passed requiring auto insurance companies to determine the cost of insurance policies based on the driver’s safety record, the annual number of miles driven and the amount of years the driver has been driving, in that order. The law also prohibits insurers from offering discounts to customers who switch from one company to another.

Proposition 33 offers persistency discounts to drivers regardless of which company they’ve insured with, allowing customers to maintain the discount even if they switch companies. With current regulations, drivers forfeit any dis- counts they were receiving from the previous insurer when they switch companies.

On the flip side, drivers who have never been insured, who have let an insurance policy lapse for more than 90 days or drivers who were not insured for more than 18 months in the last five years because of job loss (resulting from lay off or furlough) will have to pay higher insurance rates. This includes college students who have never driven or owned a car and drivers who have been unable to drive because of illness or injury. It does not include children living with a parent who are on a parent’s insurance policy or active military on deployment.

The anticipated fiscal impact of the proposition isn’t expected to be significant. Although auto insurance agencies pay a premium tax to the state, the discounts could potentially influence more people to buy insurance, resulting in more tax revenue.

Opinion

Proposition 33 is largely funded by Mercury Insurance’s Founder and Chairman, George Joseph. Joseph has contributed $16 million to fund the initiative and gave the same amount to an almost-identical proposition in 2010. California voters rejected it.

If Proposition 33 passes, new and student drivers, as well as drivers who have let their insurance lapse, are at risk of paying dramatically higher insurance rates. According to the Official Voter Information Guide, states that have passed a surcharge, such as Proposition 33, have paid extremely high premiums, including a 61 percent increase in Texas, a 79 percent increase in Nevada and a 103 percent increase in Florida.

Drivers’ inability to pay the higher rates may result in more uninsured motorists on California roads, therefore increasing the cost of uninsured motorist coverage for those who do have insurance.

Insurance broker Briana Toia doesn’t think the number of uninsured motorists will increase, but also believes drivers should be responsible enough to have insurance if they’re going to own a car.

“If you can afford to buy a car, put gas in it and go from point A to Z and back, then you should be able to purchase liability insurance to protect yourself and the people around you,” Toia said.

Although I would also like to have that sort of faith in the drivers around me, I don’t. Increasing the cost of anything in an economy such as this is dangerous. I myself have missed an insurance payment and let a policy lapse because I couldn’t pay the bill. I can’t just stop driving because I can’t afford the insurance.

Proposition 33 has been rejected by voters before and it should be rejected again. Now is not the time to increase premiums for anything, let alone something meant to protect the safety of California drivers.