State Farm Announces 2 Percent Insurance Rate Hike in Minn.

State Farm on Friday announced an average rate hike of 2 percent that goes into effect April 30 for Minnesota motorists.

Motorists looking for cheap insurance quotes in the North Star State might see higher rates and premiums depending on the type of coverage they want, possible discounts offered, where he or she lives, the kind of car insured, who drives it and how much it is driven.

The insurer said in the statement that premiums for personal injury protection (PIP) will go up for most customers. Customers with liability and comprehensive coverage will see lesser increases and the extent of price hikes for collision coverage will vary for policyholders.

Reform of PIP and no-fault types of insurance is a hot topic around the U.S. In Florida, changes to HB 119 faced a rocky road through the state Legislature before being sent to Gov. Rick Scott this month for approval. Also this month, senators in New York approved a trio of bills aimed at combating criminal operations that take advantage of the state’s no-fault law, which mandates compensation for parties injured in collisions regardless of who was at fault. Legislators in both states said the growing problem of insurance-related crimes is linked to premium hikes for all policyholders.

Minnesota also has a “no-fault” system with rates that officials there concluded “seem unusually high” in costs when compared to other no-fault states, according to a 2005 report.

Data made available by the Insurance Information Institute indicate that, in the third quarter of 2010, Minnesota had the sixth-largest average PIP claim size out of 19 states that offered that coverage type. Minnesota’s average was $7,364.

Company representatives also said the recent rate hikes in Minnesota still keeps the overall rates there 18.7 percent lower than rates “nine and a half years ago,” and that the carrier is still “the largest insurer of autos in Minnesota and in the nation.” About 20 percent of vehicles insured in Minnesota has a State Farm policy, according to the statement.

About Charles Nguyen
Charles Nguyen is an enterprising journalist who reported for and the Desert Dispatch and was the editor in chief of the Guardian (the twice-weekly newspaper at the University of California, San Diego) before coming to Online Auto Insurance News.

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