State Farm Mutual Automobile Insurance Co. announced it is lowering its overall automobile insurance rate level in Colorado an average of 7.2 percent beginning July 16. The rate reduction represents an annual savings of $38.8 million to the company’s Colorado customers, State Farm said.
With this reduction, State Farm Mutual has cut rates nine times and more than 40 percent since July 1, 2003, when the state switched from a no-fault to tort auto insurance system.
In addition, State Farm recently announced a $19.1 million dividend in Colorado from which auto policyholders in the state will receive 7 percent of their semi-annual premium. Dividend payments began in early April and will continue throughout the year.
“State Farm has very aggressively reduced rates in the four years since the change in Colorado’s auto insurance system,” said Ken Cook, vice president of operations for State Farm. “The old system had clear cases of abuse and costs were out of control. Due in a large part to the change and Colorado’s very competitive auto insurance marketplace, rates are now much lower and customers are paying less for their auto insurance.”
“Legislators should be thanked for moving away from the state’s costly no-fault system to what we now have in place, which is similar to what most other states have,” Cook added.
For the current rate change, premiums for medical payments and comprehensive coverages are decreasing the most. Comprehensive coverage pays for losses from such perils as theft, storm damage, fire, vandalism and glass breakage. Most policyholders will see a decrease in their liability and collision coverage premiums.
Premium changes for individual motorists will vary depending on factors such as the coverages they carry, discounts for which they qualify, where they live, kind of car insured, who drives it and how much it is driven.
About one in every five cars insured in Colorado is insured by State Farm, according to the company.
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