Tag Archives: State Farm

State Farm Files First Pay-As-You-Drive Plan in California

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The Insurance Journal is reporting that State Farm Mutual Automobile Insurance Co. has submitted the first application of offer a pay-as-you-drive program in the State of California. Such programs reward drivers who have low mileage with reduced car insurance rates.

California approved pay-as-you-drive regulations last October, but State Farm is the first insurer to submit a rating plan where motorists’ insurance rates will be based on actual mileage driven rather than estimated mileage. If the state insurance department approves the proposal, customers of State Farm will have the option to switch to the new verified mileage plan, which the insurer is calling “Drive Safe and Save.”

Policyholders who choose to purchase this type of auto insurance coverage would then be rated based on the actual number of miles they drive annually, and customers who reduce their driving habits by even 500 miles a year will benefit from the switch.

The filing must be approved by the State of California before being placed on the market for consumers to purchase. Steve Poizner, California Insurance Commissioner, said that he hopes other insurance companies will follow State Farm’s lead in offering such a program.

The filing must be approved by the state before being placed on the market for consumers to purchase.

Insurance Commissioner Steven Poizner said he hopes other insurers will follow State Farm in offering the product.

State Farm Homeowners Insurance Rates Increase in Louisiana

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Consumers seeking cheap homeowners insurance in Louisiana should be advised that State Farm Fire and Casualty Co. has filed a rate increase request for homeowners policies in that state. Across the board, the average increase will be almost 10 percent.

State Farm is the largest home insurer in Louisiana, with roughly 300,000 policyholders in the state.

Earlier this year, State Farm request a much higher rate increase – an average 19.1 percent hike – but state Insurance Commissioner Jim Donelon rejected it, calling it unreasonable, according to a report in the Insurance Journal.

Last year, Louisiana approved an average 8.3 percent rate increase for State Farm, after the insurer filed a request for an increase of 13.7 percent.

The company has also request homeowners insurance rate increases twice in the past year, in Texas, but is reported to have filed suit against the Texas Department of Insurance (TDI) because of its intention to post the rate filings on the Department website. State Farm and the state of Texas have been involved in homeowners insurance rate disputes for several years. In November, 2009, TDI instructed SFL (State Farm Lloyds) to refund $310 million to policy holders in the Lone Star State, after discovering that the insurance company had been overcharging clients for the past six years.

The repayments were halted when State Farm appealed the Texas order. The case remains unresolved.