Consumer Federation of California

Consumer Advocates Urge CA Democratic Party to Oppose Prop 17 at This Weekend’s State Convention

This week, the California Labor Federation joined a growing list of organizations in opposition to Proposition 17, the Mercury Insurance-sponsored measure that would allow insurance companies to raise drivers’ premiums based on their history of buying auto insurance.

Prop 17 is also opposed by consumer and citizen groups including Consumers Union, Consumer Watchdog, Consumer Federation of California, California Alliance of Retired Americans and VoteVets.org. The full list of Stop Prop 17 coalition partners can be seen here: https://www.stopprop17.org/2010/03/03/646/

The California Labor Federation is made up of more than 1,200 AFL-CIO and Change to Win unions, representing 2.1 million union members in manufacturing, retail, construction, hospitality, public sector, health care, entertainment and other industries.

Doug Heller, with the Stop Prop 17 campaign, said today, "Labor organizations that represent millions of California’s working families have joined the fight to stop this insurance industry ripoff that will increase the price of auto insurance. While Mercury Insurance will spend millions of dollars to try and buy this election, groups representing millions of Californians will be warning voters to oppose Prop 17."

This weekend the Democratic Party of California, at its convention, will decide whether to oppose Prop 17. Party delegates are being urged to join labor, consumer, senior and veterans groups and oppose this insurance company funded initiative. 

Earlier this week, the California Department of Insurance issued a scathing report about Prop 17 sponsor Mercury Insurance’s history of overcharging and discriminating against customers and the company’s failure to make promised changes after similar investigations in 1998 and 2002.  The Department has filed an administrative lawsuit against Mercury.

"Democratic party members should take a strong stand against an industry bully with a nasty track record of cheating California drivers that is now running a deceptive campaign in order to raise auto insurance premiums on Californians already struggling in a tough economy," said Heller.

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.

Mercury Insurance has spent over $5.25 million on its campaign for Prop 17 to date.