NU Online News Service, July 28, 3:18 p.m. EDT
As part of an agreement with California regulators, an automobile insurance subsidiary of the Los Angeles-based Farmers Insurance Group said about one-third of its customers are eligible for an average $50 policy premium rebate per vehicle and an average 14.5 percent rate reduction.
Mark Toohey, spokesman for the largest insurer of automobiles in California, said Farmers insures more than two million vehicles–about 640,000 in Farmers Insurance Exchange.
The rebate and rate reduction are available to Farmers Insurance Exchange policyholders if they renew between now and Jan. 15, 2011, Mr. Toohey said.
New rating rules adopted by the Department of Insurance several years ago said auto insurers cannot use where a person drives to determine rates as much as they use other factors such as driving experience, driving record and annual mileage. Farmers, wholly owned by Zurich Financial Services Group, is now in compliance with the regulations, said Mr. Toohey.
The remainder of Farmers' auto policyholders are insured by Mid-Century Insurance Co., which is already in compliance, Mr. Toohey said. Policyholders with Mid-Century are not eligible for the one-time rebate and rate reduction.
The agreement "brings equilibrium" to both companies in California, said Mr. Toohey.
In announcing the news, state Insurance Commissioner Steve Poizner said the agreement was worth a combined total of up to $100 million in savings. Mr. Toohey said that is if every single policyholder renews.
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