Advocates Say ‘Intentionally Dishonest’ Is Par for the Course for Prop 17 Sponsor Mercury

by Campaign for Consumer Rights, Earthtimes

Mercury Insurance’s treatment of its policyholder Amerigraphics, a printing and graphics business in Sherman Oaks, California, was "despicable" according to a Court of Appeal ruling issued earlier this week.  Mercury Insurance is the sponsor and 99% funder of Proposition 17 on the June ballot, which would give auto insurance companies a new way to raise premiums on California drivers.

The Court’s strong language came in the case Amerigraphics, Inc. v. Mercury Casualty Co. (Case #B208654).  Mercury had appealed the case after being found to have engaged in bad faith with "malice, fraud or oppression" for refusing to pay a reasonable claim in a timely manner after its policyholder’s business was flooded.  

"Mercury tries to spin the facts," the Court explained in its decision.  But, the court also wrote, "the evidence showed that Mercury was intentionally dishonest and showed a conscious disregard of Amerigraphics’ rights."

"Voters shouldn’t trust a ballot initiative fully funded by a company that judges called ‘dishonest’ and ‘despicable’ in its treatment of policyholders,"  said Doug Heller with Stop Prop 17.  "Mercury’s multi-million dollar campaign to sell Prop 17 and the auto insurance surcharges it would allow is just as dishonest as Mercury’s treatment of its customers."

The Court upheld the ruling in favor of Amerigraphics, though it reduced the jury-awarded punitive damages Mercury had to pay, from $1.7 million to $500,000, in order to comply with Court-mandated limits on damage awards.  The decision can be downloaded at:

Earlier this year, the California Department of Insurance released documents exposing more than a decade of bad behavior by Mercury.  In the reports, the Department found that Mercury had written and unwritten rules to surcharge or deny policies to members of the military, self-employed customers, the unemployed and unmarried people living together.  Describing Mercury’s behavior in a 2009 legal action against the company, government regulators wrote: "Mercury has a deserved reputation for abusing its customers and intentionally violating the law with arrogance and indifference."

Prop 17: Another Way to Abuse California Insurance Customers

Prop 17 would create an insurance surcharge on drivers, including soldiers and seniors, who have had a lapse in car insurance coverage for virtually any reason during the past five years, or who missed a single payment.  Under the measure, people who stopped driving and didn’t need insurance for a time would be required to pay up to a thousand dollars more for car insurance when they sought to restart coverage.  Currently, insurance companies are prohibited from imposing such a surcharge in California.

The initiative is opposed by consumer and citizen groups including Consumers Union, Consumer Watchdog, Consumer Federation of California, California Alliance of Retired Americans and

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