Two insurers have filed for rate decreases in California. According to the California Department of Insurance, 21st Century, the state’s fifth largest auto insurer, with more than 740,000 policy holders, is seeking a 12 percent reduction for drivers in Los Angeles. The overall statewide savings is projected to amount to $60,484,656. Safeco, the eighth largest homeowners insurer in the state, is seeking to reduce rates for its policyholders statewide by 20 percent on average, a savings of nearly $36 million overall, the company predicted.
Commissioner John Garamendi said he plans on approving the requests upon successful review.
21st Century’s action also brings it into compliance with the Commissioner’s new regulation that reduces the impact of territory on the pricing of auto insurance, according to CDI. The average policyholder in Los Angeles would realize a savings of $218.72 annually. “21st Century Insurance began in Los Angeles nearly 50 years ago, so we’re happy to be able to reward our loyal hometown customers with significant savings,” said Bruce Marlow, president and CEO of 21st Century Insurance.
The filing follows a contentious battle with much of the insurance industry over rating factors. Garamendi recently changed the regulation to have rates based first on driving safety, miles driven, and driving experience before giving weight to other rating factors, such as ZIP codes.
Safeco’s reduction should provide its homeowners insurance customers with an average savings of $190 annually. Its filing, which must be reviewed by the Department of Insurance before any approval is given, comes on the heels of the Commissioner’s June order requiring four major insurers to justify their rates. An earlier study by the Department determined that insurers have been paying far less in claims than they collect in premiums.
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