Five of West Virginia’s largest carriers have pledged to lower premiums by more than $54 million, according to Insurance Commissioner Jane Cline. Within the past month State Farm, Nationwide, Erie, Allstate and Westfield have pledged to lower their premiums.
According to Cline, most West Virginia drivers can expect their auto insurance premiums to fall around 5 percent as carriers pass on savings from new insurance laws. The five insurers carry about 70 percent of policies held in the state, and their reductions will represent a 5.4 percent average decline from the premiums they currently charge.
What’s behind the discounts are a series of insurance law reforms that Democratic Gov. Joe Manchin signed into law in April, said Cline, in a presentation to the Charleston Rotary Club at the University of Charleston.
Insurers’ most sought-after reform was a ban on third-party “bad faith” lawsuits, or suits filed against insurers by non-policyholders involved in an accident or claim with a policyholder. Under the new law, third-party plaintiffs will have to file administrative complaints instead.
Manchin’s office said the premium cuts — scheduled to take effect in July, after the new laws kick in — would probably get even bigger.
“The governor said this legislation would result in at least $50 million in reductions, and that’s already happened,” Lara Ramsburg, a spokesperson for the governor told the Charleston Gazette. “We’re extremely encouraged, and with the competition now in place, that number is going to grow.”
Other types of coverage are also getting cheaper due to recent insurance reforms, Cline said.
The state’s biggest homeowner insurance carriers have pledged to cut rates by a total of $3 million since this year’s insurance reforms were signed. And the West Virginia Physicians’ Mutual Insurance Co., the doctor-run insurer created last year to provide more affordable malpractice coverage, has seen claims filed drop about 25 percent, making a rate decrease likely in the future, she said.
The transition of the state Workers’ Compensation system to a new private, for-profit mutual company should trim employers’ Workers’ Comp premiums by up to 15 percent starting next year, Cline also said.
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