Insurance rates have dropped by an average of 30 percent in the past four years among the larger insurers in the state, an insurance official estimates.
Consumers are coming out on top under Colorado's new insurance law.
On Monday, State Farm Insurance officials announced the company's ninth rate decrease -- 7.2 percent -- since the new system became law in 2003.
That marks roughly a 43 percent total decrease in premiums in the past four years.In addition, State Farm officials announced $19 million premium refunds to their insured, equating to about $23 savings per car -- savings derived from fewer claims.
"We've seen across-the-board rate decreases since 2003, and many of the large insurers are seeing the double-digit decreases," said Carole Walker, executive director of the Rocky Mountain Insurance Information Association.
"Frankly, I've been surprised we've continued to see them come down this much. It shows a stabilization in the marketplace."Under the former no-fault system, auto insurance companies paid medical bills in crashes regardless of fault, which resulted in system abuses. The new system, called a "tort" system, makes the at-fault driver responsible for payment."We were paying through the roof for all those no-fault claims," said May Martinez Hendershot, spokeswoman for State Farm in Greeley.
"We are now able to translate the favorable claim experiences to lower premiums.
It just shows the market we are doing exactly what we said we were going to do.
We told voters in 2003 that rates would decline and they are."Prior to the law change, personal injury protection coverage had gone up 80 percent in 18 months and overall rates were rising by 25 percent to 30 percent, Walker said."In 30 years in Colorado, the no-fault system was just too expensive," Walker said. "In 2003, we were in a cost crisis. Instead of seeing double-digit decreases, we were seeing double-digit increases.
"Walker said the decreases have helped stabilize Colorado premiums to be more in line with national rates, which have decreased not quite 1 percent.
"They're coming down a little bit (nationally), but this sort of dramatic decrease of rates, adding up to more than 40 percent in four years, is something I haven't seen in the marketplace before," Walker said. "We likely won't see as dramatic rate decreases" in the future.
Walker said in surveys of the Top 5 Colorado insurers -- State Farm, Farmers, American Family, All-State and Progressive -- rates have come down an average of 30 percent since 2003, when the tort system was enacted.
The law's fourth anniversary is July 1.Rate decreaseState Farm's most recent rate decrease will be effective July 16 and be applied to premiums when customers renew their rates. Dividend payments began in April and will continue throughout the year, as customers renew their policies.By Sharon Dunn, Greeley Tribune
1 comment:
very good !!
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