November 18, 2012 at 03:00 AM EST
Car Insurance Proposition Knocked Down by California Voters reported Best Car Insurance Net
(EMAILWIRE.COM, November 18, 2012 ) San Francisco, CA -- California voters rejected Proposition 33, which was a car insurers measure that allowed for discounts to drivers who maintained continuous coverage, but raised the rates for those who did not maintain consistent history of coverage.

The current California law states that insurers can offer loyalty discounts to those who maintain continual coverage with a single company; however, it prohibits other companies from utilizing discounts to in order to attract customers. If Prop. 33 had passed, insurers would have been capable of providing discounts based on continual coverage with any company.

The nay-winning vote tally marks the second time in two years that voters turned down such an effort by insurers.

Supporters of the measure, which gained 99% of its funding from the Chairman of insurer Mercury General Corp., George Joseph, said the move would have increased competition within the market. Just as any market-based argument, he stated it would thus result in lowered rates for a majority of drivers.

Opponents, led by Consumer Watchdog, stated that the discounts would have been easily offset by higher prices on those who had to keep inconsistent insurance. Individuals who discontinued insurance due to unemployment, inability to drive, or the lack of a vehicle altogether, would be punished for reasonable situational uninsured periods.

Critics also stated that the measure would erode the rights afforded by Proposition 103, which was an initiative approved over two decade go that noted that insurers could not factor past coverage when setting rates.

Joseph contributed $16.9 million to campaign the measure. His budget easily trumped the $275,000 that was raised by opponents of the measure.

The first time such a measure was voted down was during the 2010 election period. Proposition 17 held many of the same core concepts and effects of Prop. 33. The supporters of the currently rebuffed measure stated the most recent version had more discounted rates than the last.

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