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Prop 33 Billionaire Admits His Company Doesn't Give Promised Discounts

SACRAMENTO, Calif., Nov. 3, 2012 /PRNewswire-USNewswire/ -- In a stunning admission, billionaire George Joseph stated that his company, Mercury Insurance, does not offer its own customers the "persistence discount" that Proposition 33 promises people would receive by "shopping their discount" around if the initiative is approved. Mr. Joseph has poured $17 million into the Prop 33 campaign.

The central Prop 33 argument is that consumers would benefit if they could ask other insurers to honor a "persistence" discount that their current insurer may grant them for being loyal customers for many years. Prop 33 ads promising voters would save if you could "shop your discount" verge on false advertising given the actual practice of the company Mr. Joseph owns.

In an interview with reporter Michael Finney that aired on KGO TV (ABC) Channel 7 San Francisco yesterday, Joseph acknowledged that a loyalty or persistence discount is a fiction when it comes to his own company:

Finney: What persistence or loyalty discount does Mercury offer here in California?

Joseph: Almost none now. Almost none.

Mr. Joseph admitted that Proposition 33 doesn't create a discount. It establishes a hypothetical right when shopping for insurance to ask a company to honor a "persistence" discount that many insurers including Mercury do not offer:

Finney: So, you're taking the concept of a discount, not necessarily the discount?

Joseph: That's right.

George Joseph recently revealed to the Los Angeles Times that Prop 33's goal is to make it legal for Mercury and other insurers to raise rates on customers. Proposition 33 would allow insurers to surcharge millions of Californians, including motorists with perfect driving records, if a driver had a lapse in coverage for 90 days within a five year period. This surcharge would apply even if the driver did not own a car, or was laid up in a hospital bed unable to drive during the break in coverage.

From 1996 to 2002 Mercury defied state law and tacked this surcharge onto customers, until it was ordered to cease and desist. While Mercury was violating this law, the company raised rates on many good drivers by 25% or more. Prop 33 would legalize such rate hikes.

Consumer, labor, senior citizen, women's and civil rights organizations, college student leaders and 40 newspaper editorials oppose Prop 33.

Learn more at http://noonprop33.consumercal.org/  and http://stopprop33.consumerwatchdogcampaign.org/

CONTACT:
Richard Holober
Consumer Federation of California
+1-650-307-7033
holober@consumercal.org

SOURCE Consumer Federation of California

About PR Newswire
Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

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