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                                                                    EXHIBIT 10.9

                              AMENDMENT 1996-I TO

                          MERCURY GENERAL CORPORATION
                              PROFIT SHARING PLAN

          WHEREAS, Mercury General Corporation (the "Company") maintains the
Mercury General Corporation Profit Sharing Plan (the "Plan"); and

          WHEREAS, pursuant to Section 9.1 of the Plan, the Company has the
right to amend the Plan; and

          WHEREAS, the Internal Revenue Service has requested certain changes in
the Plan as a condition for issuing a favorable determination letter with
respect to the Plan.

          NOW, THEREFORE, the Plan is hereby amended as follows, effective as of
January 1, 1987:

          1.  Section 3.6(a) of the Plan is amended by changing the period at
the end of the last sentence thereunder to a comma, and inserting the following
immediately thereafter:

          "which percentage of Compensation may be expressed in increments of
          1/4 of 1%."

          2.   The second sentence of Section 3.6(b) of the Plan is amended to
read as follows:

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          "For purposes of the preceding sentence, the Company, in its sole
          discretion, may treat all or any part of its Company Contributions and
          Employer Matching Contributions as Compensation Deferrals if the
          conditions of Treasury Regulations Section 1.401(k)-1(b)(5) are
          satisfied."

          3.  Section 3.6(b) of the Plan is further amended by adding the
following at the end thereof:

          "For purposes of this Section 3.6, (1) all elective contributions that
          are made under two or more plans that are aggregated for purposes of
          Code Section 401(a)(4) or 410(b) (other than Code Section
          410(b)(2)(A)(ii)) shall be treated as made under a single plan which
          must satisfy Code Sections 401(a)(4) and 410(b) as though they were a
          single plan; (2) if this Plan and one or more other plans are
          permissively aggregated for purposes of Section 401(k) of the Code,
          such aggregated plans must also satisfy Section 401(a)(4) and 410(b)
          of the Code as though they were a single plan; and (3) the actual
          deferral percentage of a Highly Compensated Employee shall be
          determined by treating all cash or deferred arrangements under which
          the Highly Compensated Employee is eligible (other than those that may
          not be permissively aggregated) as a single arrangement."

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          4.  Section 3.6(d)(l) of the Plan is amended by deleting the last
sentence thereunder and by inserting the following in lieu thereof:

          "The amount of excess Compensation Deferrals to be distributed or
          recharacterized shall be reduced by excess Compensation Deferrals
          previously distributed under Section 3.5(b) for the taxable year
          ending with or within such Plan Year and by excess Employer Matching
          Contributions distributed or recharacterized for the Plan Year
          beginning in such taxable year.  Recharacterized excess Compensation
          Deferrals shall remain subject to the nonforfeitability requirements
          and distribution limitations that apply to Compensation Deferrals."

          5.   Section 3.7(b) of the Plan is amended by adding the following at
the end thereof:

          "For purposes of this Section 3.7, the test for multiple use of the
          alternative limitation provided under Treasury Regulation Section
          1.401(m)-2(b) shall be applied.  An excess Contribution Deferral that
          is recharacterized shall be taken into account in the Plan Year in
          which the contribution would have been received in cash by the
          Participant had the Participant not elected to defer the amounts; an
          Employer Matching

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          Contribution shall be taken into account for a Plan Year only if it is
          paid to the Trust Fund by the end of the 12th month following the
          close of that year; and Employer Matching Contributions or Company
          Contributions which are used to meet the requirements of Section
          401(k)(3)(A) of the Code shall not be taken into account.  All
          contributions that are made under two or more plans that are
          aggregated for purposes of Sections 401(a)(4) and 410(b) of the Code
          (other than Section 410(b)(2)(A) of the Code) shall be treated as made
          under a single plan.  Further, if this Plan and one or more other
          plans are permissively aggregated for purposes of Section 401(m) of
          the Code, such aggregated plans must also satisfy Sections 401(a)(4)
          and 410(b) of the Code as though they were a single plan.  The
          contribution percentage of a Highly Compensated Employee who is
          eligible to participate in more than one plan maintained by the
          Company or Related Company to which the Employer Matching
          Contributions are made shall be calculated by treating all plans
          subject to Section 401(m) of the Code under which the Highly
          Compensated Employee is eligible to participate (other than those that
          may not be permissively aggregated) as a single plan.  The method of
          correction for multiple use, if any, shall be made by reducing the
          actual deferral percentage, the actual contribution percentage of
          Highly Compensated Employees, or a combination of

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          the two, in the manner described in Treasury Regulation Section
          1.401(m)-(2)(c)(3)."

          6.  Section 3.7(c)(1) of the Plan is amended by inserting the
following immediately after the penultimate sentence thereunder:

          "The vested portion of any excess contributions, together with any
          earnings attributable thereto through the date of distribution, shall
          be distributed to the Participant within the 2-1/2 month period
          following the close of the Plan Year to the extent feasible, and in
          all events no later than 12 months after the close of the Plan Year.
          Failure to correct any excess contributions within the 2-1/2 month
          period following the close of the Plan Year shall result in the excise
          tax described in Section 1.401(m)-1(e)(5) of the Treasury Regulations.
          The earnings attributable to the vested portion of any excess
          contributions shall be determined in accordance with Treasury
          Regulations."

          7.   Section 4.2 of the Plan is amended by inserting the following
immediately after the penultimate sentence thereunder:

          "The terms of any Acquisition Loan, and the repayment of principal and
          interest thereon, shall in all events

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          comply with Section 54.4975-7(b)(5) of the Treasury Regulations.
          Furthermore, any assets of the ESOP Fund attributable to Leveraged
          Shares acquired by the ESOP Trustee in a transaction to which Section
          1042 of the Code applies cannot accrue for the benefit of any person
          described in Section 409(n)(1) of the Code during the nonallocation
          period described in Section 409(n)(2)(C) of the Code."

          8.   Section 4.4(g) of the Plan is amended in its entirety to read as
follows:

               "(g) Except as otherwise required or permitted by the Code, the
          put options under this Section 4.4 shall satisfy the requirements of
          Sections 54.4975-7(b) and 54.4975-11(a)(7)(i) of the Treasury
          Regulations to the extent, if any, that such requirements apply to
          such put options."

          9.   Section 7.1(d)(1) is amended by adding the following at the end
thereof:

          "Distribution of a Participant's ESOP Account under this Section
          7.1(d)(1) shall, subject to Section 4.5, be made in shares of Stock,
          cash, or a combination of both, as determined by the Committee;
          provided, however, that if the nonforfeitable balance in the

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          Participant's Accounts as adjusted, if required, under Section 3.9
          plus any contributions to the Participant's Accounts during the Plan
          Year exceeds $3,500, the Committee shall notify the Participant of his
          right to demand distribution of his ESOP Account entirely in whole
          shares of Stock (with the value of any fractional share paid in
          cash)."

          10.  Section 7.1(e) of the Plan is amended by adding the following at
the end thereof:

          "An explanation of the Participant's right to defer distribution of
          the nonforfeitable balance of his Accounts shall be provided to the
          Participant no less than 30 days and no more than 90 days before the
          date such distribution is to be made (consistent with such regulations
          as the Secretary of the Treasury may prescribe).  If the Participant
          does not so consent, the distribution of the amounts payable shall be
          delayed pursuant to the first sentence of this subsection (e).
          However, to the extent that the nonforfeitable balance of a
          terminating Participant's Accounts is a distribution to which Sections
          401(a)(11) and 417 of the Code do not apply, such distribution may
          commence less than 30 days after the notice described in the preceding
          sentence is given, provided that:  (1) the Committee clearly informs
          the Participant that the

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          Participant has the right to a period of at least 30 days after
          receiving the notice to consider the decision of whether or not to
          elect a distribution (and, if applicable, a particular distribution
          option), and (2) the Participant, after receiving the notice,
          affirmatively elects an immediate distribution."

          11.  Section 7.2(c) of the Plan is amended by adding the following at
the end thereof:

          "In either event, such benefit payable to the surviving Spouse shall
          commence immediately.  Notwithstanding the foregoing, if the single-
          sum value of the benefit payable to the surviving Spouse is $3,500 or
          less, such benefit shall be paid to the surviving Spouse in a single-
          sum."

          12.  Section 7.2(d) of the Plan is amended in its entirety to read as
follows:

          "(d) For purposes of this Section 7.2, the following terms shall have
the meaning specified below:
          (1) Election Period:  For a Participant who separates from service
     before attaining age 35, the Election Period commences one year before his
     Break in Employment and ends one year after his Break in Employment.  For
     any other Participant, the Election Period is whichever of the

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     following periods ends last: (1) the period beginning with the first day of
     the Plan Year in which the Participant reaches age 32, and ending with the
     day before the first day of the Plan Year in which the Participant reaches
     age 35, or (2) the period ending 1 year after the individual becomes a
     Participant.  A Participant may elect to waive the Qualified Joint and
     Survivor Annuity or Qualified Preretirement Survivor Annuity commencing the
     first day of the Plan Year in which he attains age 35.  Prior to such time
     a Participant shall not be allowed to waive the Qualified Joint and
     Survivor Annuity or Qualified Preretirement Survivor Annuity unless the
     Participant incurs a Break in Employment, in which case the period during
     which an election to waive may be made shall commence on the date of his
     Break in Employment.  A Participant may revoke his waiver at any time.
          (2) Qualified Election:  A waiver of a Qualified Joint and Survivor
     Annuity or a Qualified Preretirement Survivor Annuity.  The waiver must be
     in writing and must be consented to by the Participant's Spouse.  The
     Spouse's consent to a waiver must be witnessed by a Plan representative or
     notary public.  Notwithstanding this consent requirement, if the
     Participant establishes to the satisfaction of a Plan representative that
     such written consent may not be obtained because there is no Spouse or the
     Spouse cannot be located, a waiver will be deemed a Qualified Election.
     The Participant's waiver and the

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     Spouse's consent shall state the specific nonspouse Beneficiary or
     Beneficiaries, which may not be modified without subsequent consent from
     the Spouse (unless the Spouse's initial consent expressly provides
     otherwise), and the Spouse's consent shall acknowledge the effect of the
     Participant's election.  A revocation of a prior waiver may be made by a
     Participant without the consent of the Spouse at any time before the
     commencement of benefits.  The number of revocations shall not be limited.
          (3) Qualified Joint and Survivor Annuity:  An annuity that commences
     immediately for the life of the Participant with a survivor annuity for the
     life of the Spouse which is not less than 50 percent and not more than 100
     percent of the amount of the annuity which is payable during the joint
     lives of the Participant and the Spouse and which is the amount of benefit
     that can be purchased with the Participant's vested Account.  For a
     Participant who is not married, Qualified Joint and Survivor Annuity means
     a straight life annuity.
          (4) Qualified Preretirement Survivor Annuity:  The benefit described
     in Section 7.2(c).
          (5) Spouse (surviving Spouse):  The spouse or surviving spouse of the
     Participant, provided that a former spouse will be treated as the spouse of
     surviving spouse to the extent provided under a qualified domestic
     relations order as described in Section 414(p) of the Code."

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          13.  Section 7.2(e) of the Plan is amended in its entirety to read as
follows:

          "(e)(1)  In the case of a Qualified Joint and Survivor annuity as
described in Section 7.2(d)(3), the Committee shall provide each Participant
within a reasonable period prior to the commencement of benefits a written
explanation of: (i) the terms and conditions of a Qualified Joint and Survivor
Annuity; (ii) the Participant's right to make and the effect of an election to
waive the Qualified Joint and Survivor Annuity form of benefit; (iii) the rights
of the Participant's Spouse with regard to such Spouse's required consent to the
Participant's waiver; and (iv) the Participant's right to make, and the effect
of, a revocation of a previous election to waive the Qualified Joint and
Survivor Annuity.  This explanation shall be provided to the Participant no less
than 30 days and no more than 90 days before the date benefit payments would
commence (and consistent with such regulations as the Secretary of the Treasury
may prescribe).  The written explanation shall include an explanation of the
eligibility conditions, other material features, and relative values of the
optional forms of benefits under the Plan, as well as a general explanation of
the relative financial effect on a Participant's benefit of the waiver of the
Qualified Joint and Survivor Annuity.

          (2) In the case of a Qualified Preretirement Survivor Annuity as
described in Section 7.2(c), the Committee shall

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provide each Participant within the Election Period a written explanation of the
Qualified Preretirement Survivor Annuity in such terms and in such manner as
would be comparable to the explanation provided for meeting the requirements of
Section 7.2(e)(1) applicable to a Qualified Joint and Survivor Annuity."

          14.  Section B.5(b) of Appendix B to the Plan is amended by adding the
following at the end thereof:

          "With respect to Plan Years commencing on or after January 1, 1989,
          the $200,000 limitation in the foregoing sentence shall not apply;
          instead, the limitations described in the Plan's definition of
          `Compensation' under Section 1.2 shall apply with respect to such Plan
          Years."

          IN WITNESS WHEREOF, the Company has caused this document to be
executed by its duly authorized officer this ________ day of ________________,
19___.

                                    MERCURY GENERAL CORPORATION

                                    By_________________________
                                    Its________________________

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