State Farm Mutual Insurance, the largest writer of automobile coverage in Mississippi, will lower its rate on Nov. 12, while Allstate’s rates will go up.
State Farm will drop its rates an average of 3.6 percent. The company insures about a quarter of the automobiles in the state, or about 500,000 customers.
“Whenever your next renewal begins is when you will see the reduction,” State Farm spokesman David Majors said Monday. “If your renewal date is the 12th, then you would receive the reduction.”
Other companies that received approval from the Mississippi Insurance Department to lower rates include Travelers by 0.5 percent and Southern United Fire by 0.03 percent.
Nationwide’s rates will be unchanged.
Allstate’s rates will go up 2.2 percent, effective Nov. 19.
An average decrease does not guarantee your rates will go down, Majors warned. Some customers’ rates will go up, he said.
Premiums for liability, medical payments and collision coverage will go down, but comprehensive coverage will remain the same, State Farm said. Comprehensive coverage pays for losses such as theft, fire, glass breaks and vandalism.
“(Rates) are all based on claims,” Mississippi Insurance Commissioner George Dale said.
Auto rates are determined by the type of vehicle, types of coverage, how often it is driven, where the owner lives, the number of claims and other factors.
For instance, Dale said rates in Hinds County would be higher because of the large number of auto thefts and burglaries compared to a rural county that has little traffic or congestion. If a company is selective in whom it insures, sometimes claims go down, Dale said.
If a company writes policies for people who walk through the door, and they have a large number of claims in a year, rates likely would go up, Dale said.
“Sometimes, conditions change that affect rates, such as the age of a child, a child’s grades or a person changes jobs and drives less,” Dale said.
Information from: The Clarion-Ledger,