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Election 2012: State Proposition Guide

Produced by KQED News and The California Report

Proposition 33

Changes Car Insurance Rates

Craig Miller/KQED

At a Glance

  • Proposition 33 would allow drivers to maintain a "continuous coverage" auto insurance discount even if they switch insurers.
  • Drivers with lapses in coverage during a five-year period could face increased auto rates, with three exceptions.
  • Currently, the California insurance commissioner reviews and approves auto insurance rates. Prop. 33 would allow insurers to raise rates for drivers who have not had continuous coverage, without getting approval from California's insurance commissioner.
  • Budget Impact: The Legislative Analyst's Office estimates the net impact would be insignificant.


  • This Proposition
  • Entire Guide

California's insurance commissioner regulates rates and determines what discounts auto insurance companies can give to drivers. Insurance companies use up to 16 factors to set rates, including how many miles you drive, your past accident history and how long you've been insured with the same company.

What Proposition 33 Changes

When you want to change your auto insurance company, you can lose the company's "loyalty" discount. Prop. 33 would allow auto insurance companies in California to charge you more or less based on how long you've been insured with any company under a new "continuous coverage" provision.

Who's Eligible for Lower Rates

Drivers who have maintained their auto insurance for five years. Drivers who aren't insured, or who have had a lapse in coverage in the last five years, are eligible for rate deductions if the lapse was:

  • 90 days or less, for any reason
  • 18 months or less if the reason was unemployment due to being laid off or furloughed
  • for active military service

So if you've had a lapse in auto insurance because you were ill, or decided to take the bus for a year, or never had insurance to begin with, auto insurers would be allowed to charge you a higher rate, without getting approval from the state commissioner.

Arguments For and Against:

Supporters say...

the measure would lower auto insurance rates for responsible drivers. People could take advantage of discounts and pressure their current insurers for lower rates by being able to switch companies and maintain a "continuous coverage" discount.

Prop. 33 is almost entirely funded by George Joseph, the chairman of Mercury General Corporation, an insurance company. In 2010, Mercury Corporation spent $16 million on a similar measure, Proposition 17, which was defeated. As of late September Joseph had donated $8.4 million to the current campaign.

Other supporters include the California Department of Forestry and Fire Protection firefighters and the California Hispanic Chamber of Commerce.

Opponents say...

the measure would weaken consumer protections and allow auto insurers to raise rates unilaterally. They also argue that it would lead to more uninsured motorists because the rate hike would discourage people from buying insurance.

Consumer Watchdog is the main opponent of Prop. 33, and was a major opponent of Proposition 17. By late September, the Santa Monica-based organization had raised $94,000. Other opponents include the political arm of Consumer Reports, the Consumer Federation of California and the California Nurses Association.