March 20, 2008
Calif. Orders Allstate to Cut Rates 15.9 Percent
SACRAMENTO, Calif. --- California Insurance Commissioner Steve Poizner has ordered Allstate Corp. to cut its auto rates by 15.9 percent -- an average of $124 per car, the Los Angeles Times reported.
The order was issued at the close of a proceeding before an administrative law judge. Allstate is considering whether to appeal the order.
This is the latest in a series of rate cuts in the state by dozens of car insurance companies since 2006, the Times reported. That's when the industry lost a protracted court challenge and began complying with state regulators' demands that they base premium-setting formulas on a customer's driving record, years of driving experience, and total miles driven each year.
"California's consumers deserve a competitive marketplace in which to shop around for the best rates that meet their needs," Poizner said in a statement. "This reduction reaffirms my commitment to ensuring that excessive rates are not charged. At the same time, the rate reduction is fair and reasonable for the company."
A March 14 order revealed that Allstate had requested permission to lower its rates by 7.1 percent. Clearly, Allstate doesn't share Poizner's view of what's a fair and reasonable rate.
"Suppressing one company's rates below the rest of the market is unfair to that company and not conducive to a healthy economy in California," Allstate spokesman Peter DeMarco told the L.A. Times.