George Joseph, founder and chairman of Mercury General Corp. announced the company has filed for and was approved for a 33 percent rate reduction for homeowners and 10 percent rate reduction for renters insurance policyholders in California. State Insurance Commissioner Steve Poizner also announced that he approved a rate reduction of 3 percent for Mercury auto insurance policyholders. The reductions will total a whopping $61 million in savings for California policyholders, the Department of Insurance stated.
Mercury insures 20,000 rented dwellings in California — 14,000 of which are located in Southern California. Policyholders will save a total of $1.5 million each year under the rate reductions Commissioner Poizner intends to approve, the company said. The average California renter will save approximately $80 per year. Southern California renters will save approximately $85 on average per year.
Forty percent of Californians rent, which is one-third more than the national average. During the first quarter of 2008, 47,171 homes were lost to foreclosure in California, according to DQ News, CDI said. As an increasing number of families lose their homes, many are forced to rent. Mercury’s reduction will help families impacted by the housing crisis by offering more affordable rates. At the same time, in a competitive market like California, this rate reduction helps to put pressure on other companies to lower their rates, the Commissioner’s office said.
Mercury insures 224,000 homes in California, 166,000 of which are located in Southern California. Under the reduced homeowners rates the Commissioner intends to approve, policyholders will save $18.5 million per year –an average of about $83 per home statewide, and about $100 per home for Southern Californians. Renters and homeowners savings are expected to go into effect in mid-August.
Mercury is the third largest auto insurer in the state, insuring nearly 1.5 million California vehicles, 1.1 million of which are Southern California vehicles. Under the newly approved reduced rates, California Mercury auto policyholders save an average of about $30 per vehicle, per year — a total of $41 million.
Since elected, Commissioner Poizner has approved $1.28 billion in reductions for auto insurance policies. Commissioner Poizner recently issued new regulations to clarify and streamline the prior approval rate system, making the rate filing process more efficient, accurate and transparent. The Commissioner’s regulations also help to speed the approval of rate reductions, which he said should help consumers see savings sooner.