GEICO said it is reducing personal lines auto insurance rates for its New Jersey policyholders by a statewide average of 4.1 percent, following rate reductions announced last week by California’s insurance commissioner.
The Chevy Chase, Md.-based company–a subsidiary of Berkshire Hathaway–said the decrease represents $30.8 million in savings for the state’s policyholders, or an average savings of $81 per year per policyholder.
The changes will go into effect on Aug. 9 for new policyholders, and Sept. 24 for renewal policies.
“In just three years since our return to New Jersey, we have become the third-largest insurer and we have saved New Jersey policyholders an average annual savings of over $750 already,” said Steve Cunningham, assistant vice president and general manager of GEICO’s Northeast operations, in a statement.
Breaking down the figures further, GEICO policyholders would see an average cut of 4.2 percent, GEICO Indemnity policyholders a 3.9 percent reduction, and GEICO Casualty policyholders a 4.6 percent drop.
The move follows last week’s announcement by California Insurance Commissioner Steve Poizner that he approved a 10.8 percent rate reduction for GEICO customers in the state. That translates into a savings of $65.8 million for GEICO’s California drivers.
The average individual savings amounts to $150 per policy. The new rates go into effect Aug. 30.
Mr. Poizner also said the company was entering into compliance with new state regulations governing rating a year early.
Under the new regulations, carriers will base their rates primarily on three factors–driving record, number of miles driven and years of driving experience. The commissioner said that under the old regulations, rates were heavily influenced by optional rating factors such as marital status, gender and ZIP code.
According to Highline Data–an affiliate of National Underwriter–GEICO is ranked 10th in direct premium written in California, with State Farm in the top spot.
In New Jersey, GEICO is third behind Allstate Insurance and New Jersey Manufacturers.