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State Farm Cuts Auto Rates By 5.4 Percent

Mar 20, 2007

By Urvaksh Karkaria, The Florida Times-Union, Jacksonville

Mar. 21--State Farm auto insurance customers can expect a 5.4 percent statewide average decline in premiums -- with First Coast customers enjoying savings of up to about 10 percent.

The lower rates, which will go into effect Monday, represent an annual savings of $135 million to the company's Florida customers.

State Farm Mutual Automobile Insurance Co., which bills itself as the largest auto insurer in the Sunshine State, said it covers one in every five cars insured in Florida.

Tuesday's rate reduction announcement, which reflects lower losses State Farm expects from its auto customers, comes about a month after the company said it would slash auto premiums by a statewide average of 16 percent once the Florida No-Fault law ends. Northeast Florida customers would see savings of about 12 percent to 17 percent on their auto policies.

The law, scheduled to end in October, requires drivers to purchase Personal Injury Protection, which pays up to a maximum of $10,000, regardless of fault, for injuries caused in an automobile crash.

Factoring in the combined rate decreases, State Farm said its overall auto premiums in Florida will be more than 20 percent lower than they were three years ago.

"We try to project losses into the future," spokesman Chris Neal, said referring to Tuesday's rate cut news. "We're seeing some positive trends in auto insurance, so we're adjusting our rates accordingly." The frequency and severity of auto accidents in Florida are decreasing, Neal said.

"The state is continuing to be tough on drunk driving and impaired drivers," he said. "Cars are continuing to be built -- with safety in mind." State Farm also recently announced a $25.2 million dividend in Florida, with auto policyholders getting back 2 percent of their semi- annual premium, either through a rate cut, or a mailed check.

Dividend payments will begin next month in April and will continue throughout the year.

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Copyright (c) 2007, The Florida Times-Union, Jacksonville

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