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NEWS RELEASE
Aug 26, 2002

Senator Don Perata Authors Eleventh Hour Bill To Surcharge Uninsured Motorists

Sponsor Mercury Insurance Gave Perata $25,000 Days Before Hearing on Similar Bill
Last minute gut-and-amend legislation by Senator Don Perata (Oakland) would allow insurers to charge good drivers extra if they had been previously uninsured or had a lapse of coverage.

Insurance Commissioner Harry Low is against the bill and the practice, which was partially allowed under his predecessor Chuck Quackenbush. The bill's author Don Perata received $25,000 from Mercury in June, just days before a hearing on a similar measure in the Senate Insurance Committee (AB 1488), upon which he sits. The bill was defeated after the Insurance Commissioner's office testified that the bill had no actuarial validity.

A hasty hearing of the Assembly Insurance Committee is expected this afternoon off the floor of the Assembly to discuss SB 689 as amended. The bill surcharges the uninsured motorist under the pretense of giving a purported discount to continuously insured motorists, but there are no guarantees of a rate reduction in this bill. In fact, if motorists are unable to afford insurance , then more will become uninsured, and the part of the premium paid by insured drivers to cover themselves against uninsured motorists will rise dramatically. The Assembly Insurance Committee analysis acknowledges the concern of Low and others that SB 689 violates Proposition 103, enacted by voters in 1988, which prevented the uninsured from being charged more simply for not having insurance and gave power over rate-setting to the Insurance Commissioner.

"Don Perata is engaging in eleventh hour class warfare against uninsured motorists on behalf of an insurance company that donated $25,000 to his campaign committee just days before Perata advocated for a similar bill that was heard, then defeated, in the Senate Insurance Committee in June," said Jamie Court, executive director of the Foundation for Taxpayer and Consumer Rights in Santa Monica. "Perata has taken a bribe from a large insurer to betray the poor, the legislative process, and Proposition 103, which Perata told voters he supported in order to win his offices. This cash register politics is a big 'screw-you' to motorists in Perata's district who will pay more if they have been uninsured and who are also likely to pay more if insured for their uninsured motorist coverage."
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