FOR IMMEDIATE RELEASE
INSURANCE DEPARTMENT WILL APPROVE 6 PERCENT AUTO RATE REDUCTION FOR GEICO CUSTOMERSDecreases Are Seen as Further Evidence of Fraud-Fighting Progress
Superintendent of Insurance Gregory V. Serio today announced that GEICO auto insurance customers in New York State will see an across-the-board rate reduction in 2005 resulting in a savings of 6 percent for a typical policyholder. GEICOs decision will save existing private passenger vehicle policyholders more than $100 million.
"Thousands of New York drivers are going to benefit financially from these across-the-board rate reductions and we welcome GEICOs cooperation," Superintendent Serio stated. "The favorable trends that allowed GEICO to take this step are the result in large part of regulatory reforms designed to combat no-fault auto insurance fraud, a multi-year effort that is now starting to pay off." The new GEICO rate structure goes into effect on Jan. 1, 2005 for first-time customers and starting on Feb. 15, 2005 for those that are renewing existing policies.
GEICO has more than 950,000 private passenger vehicle policyholders in New York State, which translates into about 15 percent of the states total market share as of December 2004.
Superintendent Serio last month asked GEICO and 12 other auto insurance carriers cumulatively serving more than 60 percent of the states drivers to meet with him to discuss possible rate reductions in light of industry data indicating that losses had dropped substantially between 2002 and the third quarter of 2004.
"By taking this dramatic step, GEICO is saving their New York State customers tens of millions of dollars through actual changes to their rate structure, not just dividends," Superintendent Serio stated. In addition, GEICO sought and received Insurance Department approval to alter its internal tiered rating system, a move that will link their customers improved driving performance with lower premium rates and result in even more consumer savings. GEICO has also agreed to submit another rate filing later in 2005.
Meetings with other carriers are continuing.