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The Secretary of State has verified the 2012 Automobile Insurance Discount Act will qualify for the November ballot.

The initiative had the 504,760 signatures required to place the initiative on a statewide ballot.

The initiative is sponsored by the American Agents Alliance, which says the goal of the initiative is “to get every Californian insured at a competitive price.

“Simply put, it was easy for us to obtain the necessary signatures because this initiative benefits consumers,” Ken May, president of AAA said in a statement. “It rewards consumers for following the law and allows a new discount for continually having automobile insurance.”

Current law only allows insurance companies to offer consumers a continuous coverage discount for maintaining automobile insurance if the consumer stays with the same company.

This proposal will allow consumers control of the discount so they can take that discount with them “to shop for a better price with other companies,” according to backers of the initiative. This discount is already allowed in 48 other states.

Santa Monica, Calif.-based consumer advocacy group Consumer Watchdog, which opposes the initiative and is working to put a competing proposal on the ballot, slammed AAA’s proposal and one off its supporters, Mercury Insurance Chairman George Joseph.

“The billionaire insurance baron-backed ballot measure to surcharge millions of California drivers by 40% has qualified for the November 2012 ballot,” the group stated on its website. The group stated that Joseph, “who has already contributed over $8 million to the ballot measure, will reprise the company’s previous effort to enact auto insurance surcharges with Proposition 17.”

Joseph and Mercury backed that proposition in 2010. But Joseph, not Mercury, and AAA is backing the latest proposal. In fact, Consumer Watchdog filed a formal challenge to Mercury’s rate increase request last month, claiming that Mercury was attempting to “illegally include campaign expenses for the failed 2010 ballot measure, Prop 17, in its proposed rate hike.” The group noted the 6 percent hike totals roughly $89 million in increases.

However, AAA dismissed comparisons to Prop 17.

“While our goals are similar, there have been significant improvements to make the initiative more inclusive for those who are presently insured and to reach out to those who do not have insurance,” AAA stated.

Amid the proposal is a military personnel discount, and a discount for individuals who have lost their job for a period of up to 18 months, as do those who lapse coverage for 90 days for any reason.

Under the proposal, discounts are also available for children living with their parents, and a discount for each year consumers were insured in the previous five years.

“The present system is unfair to consumers,” AAA’s May stated. “It is ridiculous that consumers lose the discount they have earned if they go to a new insurance company. We strongly believe that allowing the consumers to control their discount will create a more competitive and cost effective insurance market. We urge all Californians to read the initiative.”

Consumer Watchdog’s Insurance Rate Public Justification and Accountability Act, which must get 500,000 signatures to qualify it for the Nov. 6, 2012 ballot, would establish prior approval for health insurance. The proposed act would prohibit “unfair pricing” not only for health, but for auto and home insurance based on prior coverage and credit history.

Either initiative would expand Prop 103. Prior to the passage of Prop 103 in 1988, insurance companies were not required to file rates for approval except for health and life, and the state was considered an “open competition” state in which competition regulated the marketplace.

A major provision of Prop 103 dealt with personal automobile insurance, requiring personal automobile insurance rates to be determined using the following factors in decreasing order of importance: insured’s driving safety record, number of miles driven annually by the insured, and number of years of driving experience the insured has had.

The proposition also prevented rates from being determined based on a person’s history of insurance.

Topics California Auto