Insurance Commissioner John Garamendi approved the Automoblie Club of Southern California’s filing to reduce its insurance affiliate’s policy premiums by five percent.
The filing, officially made by the Interinsurance Exchange of the Auto Club, was based on a reduction in the number of bodily injury, property damage and collision claims. It is the first auto insurance rate decrease submitted by a major auto insurer after several years of steady rate increases within the industry. The rate reduction, effective August 1, 2004, would affect approximately 90 percent of Auto Club’s policyholders.
Auto Club had previously received approval for and implemented eight rate reductions from 1993 through 1999, accumulating a total decrease of 27.4 percent. From 1993 through 2002, however, its net decrease was 19.5 percent. The newly approved rate decrease will reduce its rates by 23.5 percent over the past 11 years.
“With the claims experience of the third largest auto insurer in California showing that rates can come down, it stands to reason that other insurers in the state could be seeing similar trends in their claims data,” Commissioner Garamendi said. “I hope my department will see more filings for rate decreases in the coming months.”
Auto Club, serving its members since 1900, has more than nine percent of the state’s written premium market share and is the largest affiliate of the AAA.