State Farm to Reduce Auto Rates in Ill. by 6 Percent

State Farm will reduce auto insurance rates an average of 6 percent in Illinois effective May 14, the company said in a statement this week.

Premiums will dip by an average $40 a year statewide, though amounts will vary based on coverages policyholders carry, where they live, the kind of car insured and how much it is driven, said Missy Lundberg, spokeswoman for the Bloomington, Ill.-based insurer.

Lundberg said the decrease stems from strong earnings that rose to a record $5.32 billion last year and a review of the company’s claims experience in Illinois.

Analysts say personal auto policies have been profitable for several years, with accident rates decreasing due to safer cars and high gasoline prices that have cut back travel.

Rates will decrease most for collision and comprehensive coverage, which pays for losses such as theft, vandalism and storm damage, the company said. Liability and medical payment coverage will increase for some policyholders and decrease for others.

State Farm, which insures about one of every three vehicles in Illinois, says the rate decrease will save customers a combined $97.2 million statewide. When the reduction is implemented, the company’s Illinois rates will be nearly 24 percent lower than 12 years ago, officials said.

The privately held company announced last month that it will pay a $60 million in dividends to Illinois auto policyholders after posting better-than-expected auto underwriting gains last year.

Topics Auto Pricing Trends Illinois