GEICO Rate Filing to Save Calif. Consumers More Than $90 Million

Some California motorists who are insured by GEICO will save an average of $127 a year, thanks to a 10.7 percent drop in the company’s auto policy rates announced Friday.

“It is good news when consumers pay less for premiums and are able to keep more of their earnings,” Insurance Commissioner Dave Jones said in a statement announcing the decrease, which should be a pleasant surprise for anyone seeking low cost car insurance policies in the Golden State.

Jones’ department said the rate reduction, which takes effect Aug. 15, will apply to nearly 720,000 policyholders statewide.

GEICO had originally asked for a 4 percent increase in auto premiums. But the insurer agreed to the decrease after the hike was challenged by a Santa Monica-based nonprofit group called Consumer Watchdog, Dave Althausen, a spokesman for the commissioner’s office, confirmed in an email.

California law bars insurers from making excessive profits and requires that any rate increases be approved by the insurance commissioner. The law, approved by voters in response to skyrocketing premiums in the late 1980s, applies to auto, homeowner and other property and casualty policies.

Insurance Commissioner Pull QuoteConsumer Watchdog contended that GEICO was “improperly estimating its future claims and seeking waivers of the rules for calculating its rates without meeting the requirements for obtaining such waivers,” the group said in a news release.

The nearly 11 percent drop in GEICO’s rates amounts to a decrease of $91 million statewide, according to the department.

The largest savings will go to drivers in the Los Angeles metro area, who stand to pay $238 less a year on average in premiums. San Diego policyholders are set to save an average of $163.

The department has approved a number of other homeowner and auto premium reductions this year, including a 19.9 percent decrease in USAA homeowner premiums and a 9.71 decrease in Topa Insurance Co.’s auto policy rates.

About Gregor McGavin
Gregor McGavin is an award-winning journalist who has reported across the country for such publications as The Associated Press, the Arizona Republic, the Pittsburgh Tribune-Review and the Press-Enterprise.

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