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State Farm cuts Auto insurance premiums will drop 9 percent Feb. 1 for State Farm Mutual Automobile Insurance Co.'s Hawaii customers and the new rates will save the policyholders $7.8 million a year, the company said.
Hawaii auto rates
The insurer says the 9%
reduction will go into
effect in FebruaryBy Russ Lynch
Star-BulletinThe company, Hawaii's largest auto insurer covering one out of every five vehicles, also announced yesterday that it will introduce a 5 percent discount on premiums for liability, personal injury protection and collision coverage paid by new customers in Hawaii with good driving records. State Farm said that to qualify, the driver must have had no accidents or traffic violations for the past five years.
State Farm's announcement is the latest in a series of auto insurance cuts across the state since the state Legislature passed an insurance reform act in 1998 mandating premium cuts of 20-35 percent if the companies didn't act on their own.
Insurance Commissioner Wayne Metcalf had argued the auto insurers in Hawaii were making excessive profits and he threatened to invoke the act if they didn't make cuts. All the insurers reacted with cuts, saying they were able to do so largely because of stricter drunk-driving laws and other changes that lowered their costs.
In June, State Farm returned $8.7 million to policyholders in Hawaii, after returning a total of nearly $23 million to them in the previous two years.
Last December, State Farm cut its premiums an average of 4.8 percent. Along with earlier cuts, the company said its Hawaii policyholders have saved 35.4 percent in premiums in the last three years.
State Farm said most customers will see lower rates for liability, collision and comprehensive coverage, which pays for losses from theft, storm damage, fire, vandalism and glass breakage. Premium changes will vary among customers, the company said, depending on where they live, what kind of car they have and how the car is used.