What is Prop 33?

November 6, 2012 is right around the corner, which means California residents need to participate in the election by voting “YES” or “NO” for Proposition 33. To better understand and make the right decision on the election, people should take a closer look at what this measure will give them. Proposition 33 is a measure that will add a section to the Insurance Code and will be known as the 2012 Automobile Insurance Discount Act. The purpose of this measure is to give discounted insurance rates to California Insurance consumers if they have followed the mandatory insurance law without any interruptions and lapses. In the state of California the Insurance Commissioner is legally assigned to regulate insurance rates and to determine what discounts insurance companies should give to the drivers. Regardless of the insurance company the consumers have used, they should be allowed to receive discounts for continuously following the mandatory insurance laws of the state. By adding the option of receiving more discounts and paying less premiums, the Insurance Commissioner is trying to motivate the consumers to continue having insurance and to make sure not to have any interruptions of coverage. By adding this measure the state is decreasing auto insurance rates for some consumers but at the same time the rates are being increased for the rest of the drivers. The drivers with no history of continuous coverage will be facing higher rates.

A YES vote on this measure means that auto insurance companies will be able to offer new customers a discount on car insurance premiums based on the number of years in the previous five years that the customer was insured.

A NO vote on this measure means that insurance companies will be able to continue to provide discounts to their long-term car insurance customers, but at the same time would be prohibited from providing a discount to new customers, who are switching from other insurance companies.
Just like any other proposition, Prop 33 has its pros and cons. The pro of this new measure is the ability of keeping a loyalty discount that insurance companies are offering their customers for being continuously insured with them, even when the customers decide to switch to different insurance companies. The con of this measure is the increased rates for drivers that do not have a history of continuous coverage, even if that interruption of the coverage had legitimate reasons.