Mercury General Corp., a Los Angeles-based low-cost insurer, today is expected to announce rate cuts for about 1.7 million of its automobile and homeowner insurance customers, mainly in Southern California, the Los Angeles Times reports.
Most of the cuts will go to automobile policyholders and, perhaps, offset at least a little pain from weekly hikes in gasoline prices.
The owners of 1.5 million cars will shave 3% off their annual bills, about $30 per vehicle, according to the California Department of Insurance. Savings statewide should total $41 million a year. Mercury is the third-largest auto insurer in California, with 9.7% of the market.
The auto rate reductions were based partially on new state criteria that downplay the importance of the ZIP Code where a car is typically parked overnight. The cut took effect in May but had not been announced, the department said.
Mercury Chairman George Joseph and California Insurance Commissioner Steve Poizner have scheduled a news conference in Los Angeles this morning to announce the rate cuts officially.
"Mercury is exemplifying consumer-friendly and smart business practices by passing company savings on to their policyholders," Poizner said Tuesday. He said he had been pushing companies to drop rates when merited.
California has had the country's most heavily regulated insurance business since voters approved Proposition 103 in 1988. As commissioner, Poizner must approve every request for a rate hike or cut.
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