Frequently Asked

							                           Questions and Answers About Proposition 17:
                       The Continuous Coverage Auto Insurance Discount Act


What is Proposition 17 - the Continuous Coverage Auto Insurance Discount Act?

Under current law, drivers who have maintained auto insurance with the same company are eligible for
a continuous coverage discount. However, a flaw in law prohibits drivers from taking this continuous
coverage discount with them if they switch insurance companies.

This flaw punishes the 80% of responsible drivers who maintain auto insurance. Current law restricts
drivers from shopping around for auto insurance and limits competition in the auto insurance market.

Prop. 17, the Continuous Coverage Auto Insurance Discount Act on the June 2010 statewide ballot,
ends that penalty and allows drivers to keep their continuous coverage discount even if they change
insurers.


How will I benefit from Proposition 17?

Prop. 17 rewards responsible drivers by allowing them to shop for the lowest rate while maintaining
their continuous coverage discount. The measure will increase competition in the auto insurance
market, providing drivers with more choices and lower auto insurance rates.

The 80% of responsible drivers who maintain automobile insurance should not be penalized and lose
their discount just because they change insurance companies.

Just as drivers are able to keep their good driver discount if they change insurance companies, they
should be able to keep their continuous coverage discount.

This discount could mean savings of up to two-hundred and fifty dollars a year for the average driver.


Does Prop. 17 include any additional consumer protections that make drivers better off than
under current law?

Yes. Prop. 17 provides additional protections and grace periods that drivers do not have now. For
example, it adds protections for soldiers so they can maintain their continuous coverage discount if they
cancel insurance while serving overseas or in another state.

Prop. 17 also adds a 90-day grace period to protect middle class families that have lapses in coverage
for job loss, illness, or simply tough economic times. Prop. 17 also includes a provision to allow insurers
to extend that grace period on a case-by-case basis.

Under current law, all these drivers lose their discount if they have a lapse in coverage for just one day.




  Californians for Fair Auto Insurance Rates | 1215 K Street, #2260, Sacramento, CA 95814 | 916-325-0056 | www.YesProp17.org |
info@YesProp17.org Paid for by Yes on 17 - Californians for Fair Auto Insurance Rates and Mercury General Corporation and Affiliates
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                                                                                         Questions & Answers




What about drivers who don’t qualify for the discount today. Will they be worse off under Prop.
17?

No. Uninsured drivers are no worse off under Prop. 17 than they are under current law. Drivers who
don’t maintain insurance don’t qualify for a discount, portable or not, and already pay more than drivers
who do continuously maintain auto insurance and receive the discount. Prop. 17 doesn’t change that. It
simply lets you take your discount with you if you change insurers.

Low-income drivers still will be eligible for California's low cost auto insurance program. Participation in
the low cost auto program counts toward qualification for the continuous coverage discount too.

Given that Prop. 17 will increase competition and choice and lower auto insurane rates, Prop. 17
encourages more people to maintain auto insurance.


Doesn’t this change how my rates are set and allow insurers to start charging huge rate
increases?

No. California has the most regulated insurance market in the country. Insurers still will be required to
base rates primarily on a person’s driving safety record, miles driven annually and driving experience.
Insurers still will be required to get approval from the Department of Insurance for any rate increases or
decreases.


What about my driving record, Proposition 103 and good driver discounts? Will this hurt those?

No. This is an extension of an existing discount. Other discounts, like the good driver or student
discount, will not be taken away.

Prop. 17 will allow drivers to shop around and take their continuous coverage discount with them to any
insurance company. This is similar to when some stores honor their competitors’ coupons, or the law
that allows cell phone customers to keep their phone number when changing companies.


Do other states allow this discount?

Yes – in fact, the vast majority of other states allow insurers to offer this discount to all drivers who
maintain ongoing auto insurance coverage. Other states like Texas, New York, Oregon, Washington
and Florida already allow insurers to reward responsible drivers with this additional discount.


Isn’t this something the Legislature should be doing? Why do we have to vote on this?

The Legislature did approve extending this discount to all drivers in 2003. However, a California court
disallowed this discount so that continuously insured drivers lost this discount when they changed
insurers. As a result, this discount must now be approved by voters at the ballot.