State Farm Drops Rates

Apr 18, 2007

By Michelle Koetters

BLOOMINGTON - If you have car insurance through State Farm, treat yourself to an extra car wash and some driving music.

State Farm Mutual Automobile Insurance Co. will lower its overall rate level in Illinois an average of 6 percent, effective May 14.

The average customer will save $20 on a six-month policy premium, spokeswoman Missy Lundberg said Wednesday. Individual rates depend on several factors, including where people live, their driving record and details about their car, Lundberg said.

In total, Illinois customers will save $97.2 million annually.

Lower-than-expected claims and a good financial year in 2006 were main factors in the reductions, Lundberg said.

Illinois was one of 30 states where State Farm decreased its auto coverage rate, Lundberg said. Rates decreased between 1 and 10 percent across the country.

Premiums for collision and comprehensive coverages will decrease the most.

"Illinois just had a really good year when it came to claims," Lundberg said.

State Farm also reported a record $5.32 billion profit in 2006, up from $3.24 billion in 2005, and the insurer's net worth grew nearly 16 percent to $58.1 billion.

For the most part, 2006 was a good year for drivers nationwide.

Auto insurance premiums are expected to fall across the country this year for the first time since 1999, said Robert Hartwig, president and chief economist of the Insurance Information Institute in New York.

"We're seeing fewer accidents, and that's good news," Hartwig said. "Ultimately, that is going to benefit customers as we pass along those savings."

And State Farm isn't the only auto insurance company to pass along savings to its clients, Hartwig said.

The competitive insurance market encourages lower rates, as well, he said.

Drivers should see decreases ranging between 3 and 6 percent in 2007, with the best drivers receiving the biggest cuts, Hartwig said.

State Farm last reduced its rate 0.3 percent in October, but its most recent significant rate deduction was 5 percent in March 2005, Lundberg said.

State Farm, the nation's largest car insurer, insures about one in every three cars in Illinois.

(c) 2007 Pantagraph. Provided by ProQuest Information and Learning. All rights Reserved.

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