NU Online News Service, May 15, 3:43 p.m. EDT
California Insurance Commissioner Steve Poizner said yesterday that he has approved a cut in State Farm auto insurance rates averaging 8 percent per policyholder.
Announcing the total $219 million rate reduction at a press conference with Mr. Poizner was Rand Harbert, State Farm California senior vice president. Mr. Harbert said the reduction was possible because of the improving long-term trends in claims submitted to the company by policyholders.
"Our premiums are based on what we calculate we will need in the future to meet the obligations we have to our policyholders, and because our recent experience and trends are favorable, it allows us to pass along those savings to our customers in the form of lower rates," Mr. Harbert said in a statement.
"We are pleased to be able to help our customers at a time when many people are struggling financially due to the economic challenges we all face," he added.
Commissioner Poizner said that since he took office in 2007, "rates have fallen by nearly $2 billion for California consumers, and it is encouraging that in these tough economic times, the largest auto insurer in the state is passing company savings along to policyholders."
State Farm, the largest auto insurer in the state, has 3.3 million California auto insurance policies, covering 13 percent of the auto insurance market.
Under the newly approved reduced rates, California policyholders will save an average of about $66 per policy, per year for a total of $219 million. Rate reductions will go into effect for new or renewed policies after July 6.
In Los Angeles County the average L.A. driver will save $75 per year. State Farm writes 665,000 policies in Los Angeles County.
State Farm noted that actual savings for individual policyholders may differ, depending on a number of rating factors.
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