State Farm Mutual Automobile Insurance Co. said it had fewer claims than expected last year, so it’s lowering its premiums for Georgia drivers by 2.2 percent.
The move will save Georgia customers $23.2 million annually. The new rates will take effect Nov. 21.
It's not a trend, however, according to the state’s insurance regulators.
“For the most part, the rates have been going up between 5 [percent] and 10 percent," said Lori Tinsley, principal actuarial analyst for the Georgia office of insurance and fire safety.
The move comes on the heels of State Farm’s request to raise homeowner policy premiums by 7 percent for next year. Other home insurance carriers requested increases as well after a series of damaging storms in 2008 and 2009 resulted in most companies paying out an unusually large number of claims.
In contrast, State Farm spokesman Justin Tomczak said auto rates are being lowered because, “We had fewer claims than we expected.”
When asked why, he said, “I’d hope it would be Georgia drivers are being safer and less distracted behind the wheel, but I don’t have any studies to that effect.”
Another theory is fewer cars have been on the roads during the economic downtown, translating into fewer accidents. A study released last month by the Texas Transportation Institute said roads in metro Atlanta were less clogged for the fifth year in a row last year, even though the average driver still wasted 43 hours in traffic.
Jim Beck, chief of staff for Ralph Hudgens, Georgia’s insurance commissioner, said lower rates is a competitive move for State Farm, the state’s largest auto and home insurer.
“In this economy, people are price sensitive with the cost of gas, housing and frankly unemployment. I suspect at some level, State Farm has made a market decision to hold on to customers by offering a rate decrease.”
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