Prop 33 Cheat Sheet: Auto Insurance Rates Based on Driver History

Since 1988, when California voters approved Proposition 103, the rate you pay for your auto insurance has required the review and approval of the state's insurance commissioner. Insurance companies may use up to 16 factors to set the rate -- you're probably aware of many, including the good driver discount, the number of miles you drive each year, and a continuous coverage discount for those who have been customers for a long time.

However, companies are not allowed to use such a discount to attract new customers away from their current providers. In other words, "continuous coverage" only counts when it is with the same company, so you are rewarded for staying.

Prop 33, the 2012 Automobile Insurance Discount Act, would change that by allowing a continuous coverage discount to anyone who wants to switch from their current insurance provider. As long as you have had insurance with any company in the past five years, you could get some level of discount with your new provider.

Anyone who does not currently have auto insurance or who has had a lapse in coverage would not be eligible, unless that lapse was:

  • 90 days or less over the past five years
  • no more than 18 months in the past five years because of unemployment due to layoff or furlough
  • due to active military service

Voting YES means that you would like to allow auto insurance companies to apply a "continuous coverage" discount in setting their rates for new customers who had previously been insured elsewhere.

Voting NO means that you want to keep the current rule prohibiting such discounts.

Drivers: Currently, if a driver switches insurance providers, she cannot take the continuous coverage discount with her. For those who want to switch, this measure would appear to offer that perk. However, it will not help most people who have had a long break in coverage.

Insurance Companies: Insurance companies would be allowed to increase rates on those who don't qualify for the continuous coverage discount in order to cover the cost of those who do.

The Prop 33 campaign is financed almost solely by George Joseph, the chairman of Mercury General Corporation. Mercury was behind a failed attempt to pass a similar ballot measure in 2010, Prop 17. Joseph has given more than $8 million of his own money to the campaign.

Consumer Watchdog, a nonprofit organization founded in 1985, is the measure's primary opponent. Financially, the No on 33 campaign has so far been out-gunned, with less than $100,000 in campaign contributions raised to date.


  • Corrects current law, which punishes you for seeking better insurance or a better deal by taking away your continuous coverage discount. You should be able to shop around for a better deal without losing this discount.
  • Encourages uninsured drivers to obtain insurance, because it makes it easier for them to earn the continuous coverage discount. This makes our roads safer.
  • Prop 33 will result in more competition between insurance companies and better insurance rates.


  • Prop 33 deregulates the insurance industry, making big insurance companies less accountable.
  • It penalizes responsible drivers who did not need auto insurance in the past.
  • It leads to higher premiums and hurts California's middle-class families.
  • It leads to more uninsured motorists, because the financial surcharge applied to those who don't qualify for the discount discourages people from buying insurance.

Top Photo: Scoobay/Flickr/Creative Commons License


Prop 38 Cheat Sheet: Molly Munger's Tax for Education


Prop 32: Read the Text

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This is perhaps the only preposition that offers "Discounts" to consumers, yet the consumer watchdog is trying to convince me that it is not good for me? Well, I am the one who pays for insurance premiums every month and the idea i of reducing my bill is a good thing. Are we americans that stupid not to see?


You already have the discount. Your bill isn't going to go down.

Once again we have the argument that good & safe drivers should subsidize those poor drivers that have accidents.  I am already subsidizing my children's insurance and they should pay higher rates because they do have a much higher rate of getting into accidents.  Young drivers do have more accidents, mine have all had major and expensive accidents in their teens.  Sorry but public policy shouldn't be about re-distribution of weatlth from one group to another.  In this case it's not about economic groups but safe drivers vs. unsafe drivers.  Their are plenty of safe and low income drivers paying more to subsidize rich and unsafe drivers.  Sorry Harvey this is not good policy no matter how you spin it.  Yes on 33.

James from


When was the last time a billionaire chairmen of an insurance company spent $16 million dollars of their own money to save other people money? The answer is NEVER! In fact, this is the second time in two years that the same billionaire chairmen of an insurance company has spent that much trying to screw people out of the protections that Proposition 103 put in place in 1988.

The billionaire George Joseph has now funded both Prop 17 or 2010 and Prop 33 of 2012 trying to raise rates on people who have legitimate reasons for dropping their car insurance. Whether it is because someone is a college student, uses mass transit to get to work or even has a disability, they should not be punished for dropping their car insurance.
The "Yes" side has said they a
re patriotic, because they are saving the troops money. In actuality, they have just carved out an exception for active duty troops, because in 2010, they were not able to get USAA's support on Prop 17. Veteran's who are injured and cannot pay their car insurance, still are punished with rate hikes.

Think about this prop logically and you will find that it is a bad idea for everyone.


Hey JamesKS, it looks like your playing both sides of the fence:
JamesKS says :
The argument is that insurance is a zero sum game.  Insurance companies are currently only allowed to give continuous coverage discounts to their existing customers, like a loyalty discount.  However, this proposition would allow companies to give you a continuous coverage discount for your prior coverage with another company.  So under this proposition, you have more of an incentive to switch companies.  (You won't lose your continuous coverage discount) 
Because insurance is a zero sum game, the argument is that your new company will raise rates on new customers without continuous coverage to pay for your continuous coverage discount.  Because you are paying less, someone else must pay more.  The someone else is someone that had a lapse in coverage.  Those who have lots of money and can always afford insurance coverage benefit at the expense of those who are financially struggling.  The rich get richer and the poor get poorer.
James from
Reply | October 13, 2012 10:47 PM


Frankly I don't understand what the hoopla is about - I've been a CALIFORNIA driver - albeit senior for over 40 years and never got a "loyalty discount" as a matter of fact each year I get a renewal notice from my current insurance company (and I carry both auto and home) and ALWAYS the bill is higher each year, and I haven't had any accidents or tickets! I don't drive more than 2,000 miles a year, and I don't use my car for anything other than shopping and personal use. The Insurance company just has to "reward" my loyalty with another 5 or 10% increase! What am I doing wrong?


I would first assume that this would maybe give an incentive to uninsured drivers to get insurance with a possible discount. But I have been in the Insurance industry since 1999 and to be honest, if someone wants to be insured in order to cover their assets they will.... If they are required to in order to be driving legally like with an SR-22 they will do it with minimal coverages.