South Carolina’s new flex-rating law for personal lines property insurance is already helping to bring lower premiums to many homeowners, according to the Property Casualty Insurers Association of America (PCI).
State Farm announced this week that it will lower homeowners insurance rates by an average of 5.1 percent, noting that increased competition along with several other factors contributed to the decision.
“This is another example of how competition helps to drive down insurance rates,” Robert Herlong, vice president and regional manager for PCI said. “Instituting regulatory reforms that encourage competition has a positive effect on the insurance marketplace. The announcement that one of the state’s major insurance carriers is reducing rates to ensure that it remains competitive is proof that the reforms are beginning to work for homeowners.”
Gov. Mark Sanford signed legislation July 29 that put in place a flex-rating system, which allows insurers to adjust homeowner’s rates up or down by 7 percent without prior approval from the state’s insurance department. The new system lessens the regulatory burdens for both insurers and the regulator and encourages insurers to enter into the market.
“This system helps consumers by bringing more competition to the marketplace,” Herlong said. “Similar reforms implemented in 1999 for auto insurance have done everything that was promised. The reforms brought more insurance companies into the state, which gives consumers greater opportunity to shop around and get better rates. Competition places pressure on businesses to keep prices affordable. Now we’re beginning to see the benefits motorists have enjoyed take place for homeowners.”
Was this article valuable?
Here are more articles you may enjoy.