Lower Claims Prompt Auto Club to Drop Rates 4.1 Percent in Calif.

Policyholders insured by the Automobile Club of Southern California can expect to see their rates lowered by an average of 4.1 percent in July, according to an announcement on Wednesday from the state Department of Insurance and the Auto Club’s CEO.

Jeffrey Spring, the corporate communications manager for the Automobile Club of Southern California, told Online Auto Insurance News (OAIN) that the primary reason rates are being lowered $70 million overall is that the insurer has had to pay out less on claims in recent history. Spring said both the number of claims being filed and the size of the average claim have dipped.

California insurance commissioner Dave Jones and Robert Boutier, CEO of the Automobile Club of Southern California, at Wednesday’s press conference

“The primary purpose of the filing was to adjust our rates to reflect our loss experience,” Spring told OAIN.

The California rate reductions are set to kick in for new and renewing policyholders on July 1.

According to the CEO of the Auto Club, this is the company’s fourth rate reduction in the past nine years, amounting to a total of $383 million in slashed rates. He did not say whether or how many rate increases had been approved during that period.

New Discounts for Auto Club Policyholders

In addition to the new rate reduction, Auto Club policyholders will also have access to a batch of new discounts starting in July. The following are the new discounts introduced during Wednesday’s press conference:

  • Multi-policy discounts for homeowners
  • Group discounts for alumni association members
  • Expanded discounts for doctors, nurses, dentists and CPAs
  • Discounts for policies covering children who are away at college and don’t have regular access to the insured vehicle

According to Spring, even though the new discounts are being introduced at the same time as the overall rate reduction, the two actions are “somewhat separate.”

(Photo credit: California Department of Insurance)

About John Pirro
John Pirro is a licensed fire and casualty insurance agent specializing in various aspects of the auto insurance industry. He worked in the auto body repair industry before taking a reporting position at Online Auto Insurance News.

No comments yet.

Comment on this article