State Farm Insurance Co., California's biggest auto insurer, intends to cut drivers' rates by 5.4%, an action that will pressure competitors to continue a downward price trend. The news Thursday means $133.8 million in premium savings for State Farm customers in California.
It provoked an angry dispute, though, between Consumers Union, the publisher of Consumer Reports, and state Insurance Commissioner Chuck Quackenbush over whether regulators should be investigating excess profits at insurers and ordering even greater premium reductions.
Huge sums are at stake in a state where driving is a necessity for most people. Of California's 20 million drivers, 15 million are insured. In 1995, the average premium for a 30-year-old motorist with a clean record was $566, while a 30-year-old with one ticket and one accident paid $1,129.
State Farm's proposed reduction requires Insurance Department approval. It follows a cut of 1.7% in September, and is the latest in a series of premium reductions.
Consumers Union policy analyst William Ahern replied with accusations that Quackenbush "has decided to protect excessive auto insurance rates and profits in California."
Source: http://articles.latimes.com/1996-08-16/business/fi-34920_1_state-farm
From Associated Press
1 comments:
This comes as welcome news for those automobile owners who have been struggling to pay for their insurance, even after being hit by the economic downfall. The new rates will be applicable for those buying new policies and for those who’ll be renewing their old ones.
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