California Insurance Commissioner Dave Jones issued a decision providing for an 8.18 percent rate reduction in homeowners insurance by Mercury Casualty Co., and then slammed the carrier for filing suit challenging the decision.
Jones’ action comes after a public hearing on Mercury’s request to raise its rates by 7.3 percent. Based upon the evidence presented during the public hearing, it was determined that the maximum rate Mercury may charge its homeowner policyholders must be reduced, according to Jones.
The reduced rates would impact roughly 270,000 homeowners in California. The reduced rates will save Mercury’s California customers more than $16.5 million, and would take effect in June of this year, according to Jones.
“The rate reduction provided for in this decision would offer much-needed financial relief for homeowners and would no doubt help consumers keep more of their hard-earned dollars in today’s tight economy,” Jones said in a statement. “My priority at the Department of Insurance is to fight for consumers to make sure homeowner insurance rates are fair and not excessive.”
Mercury has filed a suit challenging Jones’ rate reduction decision. Mercury spokesman Shane Smith defended the company’s rate request via a written statement.
“Mercury’s insurance rates are among the most competitive in California – as exemplified by our 97 percent renewal rate on homeowner’s policies,” according to the statement. “We are therefore disappointed in the Commissioner’s ruling, and though we don’t comment on pending litigation, Mercury looks forward to the resolution of this issue.”
“I have directed the Department of Insurance to vigorously defend against Mercury’s effort to deprive homeowners of this rate decrease,” Jones said.