BY HENRY GILGOFF
STAFF WRITER
May 2, 2005
Allstate Insurance Co., New York's biggest auto insurer, will cut premiums by a modest statewide average of 3 percent, following similar moves by major competitors.
The company's agreement with state regulators is expected to be announced today.
"The average rate reduction constitutes anywhere from a $50 to $350 annual savings in the first full year of the new rate structure," said Howard Mills, New York's acting superintendent of insurance.
In the city and on Long Island combined, Allstate Insurance and Allstate Indemnity, a small affiliate for higher-risk drivers, cover about one of every five cars, said Allstate spokesman Manuel Goncalves.
Eight other groups or companies have agreed to price reductions this year, and more are expected to follow. Fewer accidents, a fight against fraud and increases in premiums in recent years are factors that helped boost industry profits.
The high cost of auto insurance has been a financially painful thorn for many car owners, particularly in the metropolitan area, and with average decreases, the impact on individuals can vary. Still, Mills argued that any cut in the cost of auto insurance is significant, particularly with an insurer that affects so many New Yorkers.
The two Allstate companies, he said, have about 1.5 million policyholders in New York. Of those, 97 percent are covered by Allstate Insurance Co., according to Mills' staff. The remainder are insured by Allstate Indemnity, which has agreed to a 5 percent average premium cut. The decreases will save Allstate's New York policyholders an estimated $50 million this year, according to the Insurance Department.
Average premium reductions by Allstate and others coincide with a markedly improved financial condition of the industry. With that in mind, the Insurance Department in November began asking the biggest companies to review their pricing plans.
The previous change in Allstate Insurance Co.'s auto premiums pushed up rates by an average 7.8 percent in New York and was implemented in early 2003. The upcoming reductions for the two Allstate companies will take effect July 4 for new customers and Aug. 13 for renewals.
Allstate to lower auto insurance rates
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