Mercury Insurance has begun its campaign to allow insurers to hike auto insurance rates for Californians who have had a lapse in their auto insurance for any reason. The initiative is a repackaging of Mercury-sponsored legislation invalidated by a California Court of Appeal in 2005, after the court determined the legislation would necessarily and illegally surcharge drivers who had a coverage lapse. In its decision to overturn the law, the court explained that an alleged discount given to drivers who have had continuous insurance coverage must be offset by a surcharge on people with a lapse in their coverage, writing:

"The premiums for policyholders who, because of their characteristics, do not qualify for a particular discount must be surcharged in an amount equal to the total of the discounts given to the policyholders that qualified for the discount." [Emphasis in original] 132 Cal. App. 4th 1354, 1367-1369

The Mercury initiative would allow insurers to penalize people after missing one payment or decided not to drive for a time and let their insurance lapse.

BREAKING NEWS: Mercury Insurance Submits Initiative Signatures To Trick Voters Into Paying Higher Auto Insurance Premiums

The Campaign for Consumer Rights (CCR), a California-based nonprofit 501(c)(4) organization, is the advocacy and campaign affiliate of the Consumer Watchdog (Formerly the Foundation for Taxpayer & Consumer Rights). CCR and its campaign committee, Election Watchdog, were organized to protect consumers' interests in the ballot initiative and legislative process. We do not take positions on candidate elections.