State Farm Cutting N.Y. Auto Rates
By Daniel Hays
NU Online News Service, June 29, 9:56 a.m. EDT?State Farm Insurance will begin cutting New York State premium rates for auto coverage on July 16 and on average drivers will experience a 9.1 percent decrease, the company said.[@@]
A spokesperson for the Bloomington, Ill.-based firm, Michele Hare, explained that the first reductions would affect new business, and the reduction for renewals would begin on Aug. 15. About 1.3 million vehicle owners will be affected.
Ms. Hare said it would be the second decrease the company has given since January when it reduced rates five percent.
"We've seen a reduction in cost in claims and operations," Ms. Hare said.
The company is not certain whether there is a correlation between the cost of doing business and last year's decision by the state's highest court, which upheld a State Insurance Department rules change designed to thwart fraudulent auto injury claims.
Upheld by the Court of Appeals was Regulation 68, which set tighter time frames for reporting an injury. Notice of injury requirements were changed from 90 to 30 days and the time limit for submitting medical bills was cut from 180 to 45 days.
"We can say it certainly was a step in the right direction?Your changing very important timeframes. When your reducing time to make a claim you are allowing them less time to pursue a fraudulent claim," said Ms. Hare.
She said the company believes there could be more savings for New York's no-fault auto insurance system if an anti-fraud package of legislation the industry supports could win passage.
Ms. Hare noted that the rate decrease is an overall average and it is quite possible that some drivers with less than perfect records may not experience a reduction.
State Farm said it has the second largest share of the auto market in New York.
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