It was recently announced that motorists in California who have an Auto Club policy will benefit from a rate reduction which will affect all insurance policies that have been bought or renewed after July 1st. This reduction will represent a decrease of 4.1% in premiums that, in total, will equal savings amounting to $70 million. The announcement was made by Robert Bouttier, CEO of the Automobile Club of Southern California, and Dave Jones, California Insurance Commissioner.
The reduction in premiums will be provided by the addition of several new discounts. These include new group discounts for alumni association members, multi-policy discounts for homeowners and expanding on the current discounts offered to medical professionals and CPAs. Furthermore, children who go away to college to study and do now own a vehicle will also benefit from a student-away discount.
Commissioner Dave Jones applauded the efforts of the Auto Club in a time when the economy is still recovering: “This significant decrease delivers savings to more than one million drivers in Southern California. The Auto Club has again stepped-up and put their policyholders’ interests first. They have a history of rate decreases and have set an example I hope other insurance companies will follow.”
Indeed, this is not the first time when the Auto Club has approved discounts for its members. According to president of the Auto Club himself, Robert Bouttier, “this is the fourth auto rate reduction over the past nine years, collectively saving policyholders over $380 million and continuing to fulfill our ongoing commitment to offer our members the best insurance at the best possible price.”
The first rate decrease came in 2004 when a 5% reduction saved motorists $89 million in premiums. The second one was also the largest and it happened in 2006 when a 7% decrease resulted in $123 million in savings. The third one took place in 2009 and caused $101.2 million in savings due to a 5.4% decrease in rates. The latest rate reduction of 4.1% will affect over one million drivers in Southern California to the tune of $70 million.
This new discount for California drivers is also reflective of Commissioner Jones’ efforts as he is the one who approved the rate decrease. Since he took office in April of 2013, the state saw a significant opposition to new rate increases. In fact, his department reduced the amount of rate increases requested by $311 million, at the same time approving $962 million worth of rate reductions. In total, businesses and consumers in California benefited from over $1.27 billion in savings and around $460 million of those were only for car insurance.
Not all motorists in California will be able to benefit from these new rate reductions. Even though the Automobile Club of Southern California has been ranked by A.M. Best in 2012 as the fourth largest car insurer in the state, it still only serves a limited numbers of counties such as Los Angeles, San Bernardino and Santa Barbara. The full list of areas where the Auto Club operates can be viewed at www.calif.aaa.com.