Proposition 33 allows insurance companies to raise rates on motorists with perfect driving records. If voters buy this lemon, millions of law-abiding Californians will see a new surcharge on their auto insurance premium bills. Proposition 33 carves a loophole in state insurance law, banning regulatory review of this new rate hike.

The measure is funded by one billionaire insurance mogul, Mercury Insurance Group Chairman George Joseph, who has donated more than $16 million toward Proposition 33. In 2010, Mercury spent $16 million on a nearly identical initiative, Proposition 17, but voters said "no."

If Proposition 33 becomes law, insurers could arbitrarily raise the cost of insurance on good drivers simply because they lacked coverage at any time during the past five years. In sharp contrast to current law, insurance companies wouldn't have to demonstrate that these drivers pose a greater risk for causing an accident before they tack on the new surcharge.

These are tough times for the middle class. But Proposition 33 will penalize us for economizing if we drop insurance coverage when we don't need it.

Proposition 33 hurts:

• Disabled Californians who suspend a policy while they are in a sick bed or undergoing physical therapy, and then recuperate and want to get back behind the wheel.

• Students who don't own a car while living on campus, and need to drive to a job when they graduate. (Younger drivers already pay more because they have fewer years of driving experience. Proposition 33 would impose an additional increase of 25 percent or more).

• Folks who commute by bus or light rail, or who bike to work, and need to start driving when they move or their job moves.

• Long-term unemployed who resume driving when they find a new job.

• And despite the deceptive Proposition 33 ads, the poorly drafted initiative punishes veterans who need to rehabilitate from their wounds, or who go back to school for career training, before they start driving when they re-enter the workforce.

Twenty-eight years ago, California made automobile insurance mandatory. In response, insurers raised rates on previously uninsured motorists to astronomical levels. Thousands of drivers who wanted to comply with the law were priced out of the marketplace.

Voters then enacted Proposition 103, despite a $70 million opposition campaign from the insurance industry. Proposition 103 banned the practice of surcharging good drivers simply because they lacked prior coverage.

Making insurance affordable benefited everyone, because the new law reduced the number of uninsured motorists on the road.

Proposition 103 also gives the state insurance commissioner the authority to reject premium rate hikes that are unreasonable. Under current law, insurers must prove that a particular characteristic of a motorist is related to the driver's risk of having an accident before it can use that characteristic as an optional rating factor for pricing insurance. An insurer can adjust premium rates based on such factors as the type of vehicle, or completion of a defensive driving course – but only if it provides evidence that the rating factor is related to the risk of an accident.

Proposition 33 would reverse 24 years of insurance law and allow insurers to surcharge most drivers who had a break in continuous coverage for 90 days within the past five years, with no justification required.

If the billionaire sponsor of Proposition 33 had evidence to justify the claim that a driver with a break in coverage is a worse accident risk, he would have written the initiative to treat continuous coverage the same way California law treats every other optional rating factor. It would have required an insurance company to prove it to the insurance commissioner before imposing a rate increase.

But Proposition 33 does exactly the opposite.

Hidden in the fine print, Proposition 33 explicitly exempts from any regulatory oversight the use of continuous coverage as an auto insurance rating factor. Simply put, Mercury doesn't have the data to make its case, so it wrote itself a giant loophole in the insurance rate regulations.

Under Proposition 33, the insurance commissioner would be powerless to stop Mercury or another insurer from tacking on this surcharge on good drivers.

Among others, the Consumer Federation of California, the California Alliance for Retired Americans, Consumers Union (publisher of Consumer Reports magazine), the California Labor Federation, the California Council of Churches-Church Impact and two dozen daily newspaper editorial boards oppose Prop. 33 because it is unfair to millions of law-abiding California consumers.

Let's send a loud message to Mercury's billionaire chairman that "no" means "no" by voting down Proposition 33.

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