On one hand, proponents of California’s Proposition 17 say that the new law would lower insurance premiums for everyone. Opponents on the other hand however say that it would cost insurance customers big money while resulting in (yet another) huge windfall for Corporate America specifically, the auto insurance industry.

Do an Internet search for “Proposition 17″ and you are going to call up almost 24 million results that range from the text of the proposed law itself to outright conspiracy theories involving aliens from outer space. For the most part however, you will find articles, blog entries and editorials taking strong stands on one side of the issue or the other.

Small wonder people are confused. Here is what two San Francisco Bay Area papers have to say.

Why Californians Should Vote “Yes”

In a guest editorial that recently appeared in the Berkeley Daily Californian, independent insurance agent Mike D’Arelli writes that the proposed law would change state insurance law to benefit consumers, saving them up to $250 a year. The way it would do this is by eliminating the penalty consumers incur when they switch insurance companies. Under current law, an insurance customer who maintains continuous coverage with the same company is entitled to a “continuous coverage discount” but when they drop their coverage with that company and sign up with a different one, they are penalized and charged a higher rate associated with those who have a “gap” in their coverage.

The new law would also require all insurers to grant a three-month grace period for those who, because they do not drive or own a vehicle, do not have insurance coverage so such consumers remain eligible for continuous coverage discounts.

It should be noted that as an independent agent, Mr. D’Arielli does not represent a single insurance company; independent agents do comparison shopping from among several in order to find consumers the best rate. In this respect, Mr. D’Arielli’s editorial carries a great deal of credibility.

Why Californians Should Vote “No”

Writing in the San Jose Mercury, pastor and social critic Byron Williams writes about what he calls the “unintended consequences” of the law. He agrees with the facts carried in D’Arelli’s guest column, put points out that insurers would be able to charge hefty fees to anyone who dropped their insurance coverage for 91 days or more within the previous five years, then attempted to get new coverage. Such fees would apply even if this was due to active military service, being away at college, or not even owning a car during that time.

So…which is true? How should a California voter decide?

Qui Bono?

Most people find the legal language of such initiatives difficult to understand, and in many cases do not have the time to sit down and study them so they depend on people such as D’Arielli and Williams to guide their decisions. Both of these writers seem sincere and appear to make valid points but are either of them correct? Or could both of them be correct?

There is a third issue to consider which is “follow the money.”

It is no longer a secret particularly in the wake of the recent Supreme Court decision FEC v. Citizens United, which allows corporations to spend unlimited money to influence elections and the legislative process that law makers of both parties at the state and federal levels are now beholden to moneyed special interests.

Large corporations now write legislation that has allowed them to set up offshore shell companies, and today, two-thirds of the major corporations that do business in the United States pay no federal taxes. At the same time, they are allowed to ship jobs overseas and exempt themselves from regulations that protect consumers and the environment, yet can still get contracts from the federal government and can even get taxpayer-funded bailouts when they run into trouble.

Meanwhile, social programs, education, infrastructure, health care, consumer protections and any programs or laws that benefit ordinary working people are cut back and eliminated altogether.

What has this to do with Proposition 17? It is this: Mercury Insurance, California’s third-largest auto insurer, wrote this proposed law and to date has spent $17 million on a media campaign aimed at convincing Californians to vote “yes.”

Californians should draw their own conclusions and vote accordingly.

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