Prop 17 opponents use fools day spoof to mock Mercury Insurance, industry-funded initiative

by Dan Aiello, San Francisco Examiner

Using April Fool’s Day to its full political advantage, the Consumer Watchdog-funded (a Campaign for Consumer Rights effort) has launched a clever, tongue-in-cheek video to mock the premise and talking points of the Mercury auto insurer’s ballot initiative.

Few would argue that the Watchdog’s represents out-funded opponents of the California proposition being financed primarily with the deep corporate pockets of Mercury, but what the Consumer Watchdog project might lack in financial resources, their April first launch suggests they make up at least some political ground with wit and ingenuity.

Throughout the organization’s two-minute spoof, actors portraying California voters appear momentarily stoic while a hard-selling Mercury Auto insurance representative explains why his company has spent $3.5 million dollars to qualify the initiative, “and millions more to fund the Prop 17 campaign,” while claiming it won’t profit from its passage. “It’s just because we like you,” surmises the Mercury rep. But before he can reach the end of his sentence voters burst into laughter, apparently having caught on to this Fool’s day’s political joke.

Opponents are using April First to make light of Mercury’s implausible explanation for the initiative they wrote, paid to qualify and are spending millions to pass, but the industry cash behind Prop 17 is no laughing matter.

According to the Secretary of State’s archives concerning the measure, Mercury Insurance is Proposition 17’s primary sponsor, having paid National Petition Management $2.375 million to collect the necessary signatures to qualify the measure for the state’s June ballot. Through mid-February, Mercury Insurance remained responsible for about 98% of the funding for the “Yes on 17” campaign, having contributed about $3.5 million already, but should voters approve the measure it would afford the same opportunity for profit to all California insurance providers.

And no other state offers as much potential for profit as the insurance market of the Golden State.

California has more than 23.7 million licensed drivers who collectively pay several billion dollars in auto insurance premiums annually, making the state the industry’s largest consumer market.

Currently 80 percent of California drivers maintain continuous auto insurance consistently, which would allow them to qualify for the industry’s “persistency discount,” one of the insidious consumer markers devised to allow rate increasing by insurers.

However, about 20 percent of California’s drivers fall into the higher premium category of drivers who have had lapses in their insurance coverage, and its these consumers Mercury seeks to exploit with passage of Prop 17, the so-called “Mercury Initiative.”

Mercury, through its Yes on Prop 17 ads will try to divide and conquer California drivers by convincing the state’s electorate that drivers with lapses in coverage are identical in definition to persistently uninsured motorists, deadbeats who drive up the rates of responsible citizens.

But Prop 17’s passage would affect anyone who let their premium payment slip past its cancellation date or a host of other reasons. Prop 17 would allow insurers to require a driver remain insured from the day he or she gets a license to their last day. Those who have an unexpected job loss, experience a medical or other financial hardship, or simply find one month they must choose between food, mortgage or insurance premium, will find their financial troubles persist when insurers raise their premium (in state’s where its legal insurance premiums rise as much as 90 percent).

Veteran groups oppose Prop 17 because it doesn’t even allow U.S. service men and women to suspend their insurance while overseas fighting for their country. Should Prop 17 pass, active military and America’s veterans will be one of the groups hit hardest by rate increases.

Los Angeles Times reporter Michael Hiltzik has called Proposition 17 ‘essentially the latest attempt by Mercury (Insurance) to eviscerate Prop 103,” which passed in 1988 providing the state an elected insurance commissioner with the authority to approve insurance rates before they reach consumers.

Insurers are specifically prohibited under Prop 103 from using the absence of a prior policy as a factor in rate-setting.

Opponents point out that should Prop 17 become law, motorists facing higher auto rates, along with military personnel, include unemployed workers needing insurance to drive to work when they find a new job, students needing insurance to commute to a summer job, people who commuted by public transit needing insurance after getting a new job that is only accessible by car, and motorists who dropped coverage when recuperating from an illness or injury that prevented them from driving.

Opponents to Proposition 17 currently include Congressman and former Insurance Commissioner John Garamendi, Consumers Union, Consumer Federation of California, Vote Vets, California Federation of Teachers, California Nurses Association, SEIU California State Council, and Democratic Party Central Committees in Los Angeles, San Francisco and San Mateo Counties.

While Republican Party committees have so far not opposed the pro-business, pro-insurance industry initiative, many conservative-leaning military service members and veterans groups see the initiative as an attack on those who serve their country, making opposition to the measure bipartisan, though its mostly opposed by those representing moderate, working class and lower income drivers.