Rate reduction generates $38 million in savings for USAA policyholders
News: 2014 Press Release
SACRAMENTO, Calif. - Insurance Commissioner Dave Jones today announced an average 13.6 percent decrease for USAA homeowners and condominium policyholders in California. The reduction will result in an average annual savings of $146 for many families.
"I am encouraged by USAA's enterprising decision to offer both a rate reduction and discount for Firewise communities, which demonstrates their commitment to California consumers," said Insurance Commissioner Jones. "In the current drought environment, with the increasing risk of a devastating wildfire season, I am hopeful that the decision of USAA will spur other insurers to consider similar discounts for wildfire mitigation."
The last rate change for USAA's California policyholders was in 2011, when rates were reduced by 13.9 percent. USAA insures approximately 260,000 homeowners in California and is the 7th largest homeowners and 8th largest auto insurer in the state. The rate reduction is effective for policy renewals beginning October 1, 2014.
"This rate decrease is made possible in part by our industry-low expense ratio, and our members' efforts to maintain their homes and prevent losses," said Jeff Dixon, vice president of P&C insurance property product management at USAA. "USAA is committed to working with our members to prevent losses, which is why we're also introducing a new insurance discount for members in communities that are working together to reduce wildfire risks by forming a Firewise community."
The Firewise designation is a program sponsored by the National Fire Protection Association that recognizes neighborhoods where homeowners work together to prepare their homes to resist wildfire damage.
Examples of a few California counties that will see significant rate reductions:
- Los Angeles County - 12.2 percent reduction for an average annual savings of $138.
- Sacramento County - 16.8 percent reduction for an average annual savings of $167.
- San Francisco - 14.2 percent reduction for an average annual savings of $210.
Since elected in 2011, Commissioner Jones has approved more than $1.8 billion in savings for California consumers and businesses. These savings resulted from the department's review of nearly 2,000 property-casualty rate filings under Proposition 103.
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- The average statewide reduction for 261,354 USAA insurance homeowners and condominium insurance policyholders is 13.6 percent.
- Policyholders will receive renewal notices as soon as 60 days prior to October 1, 2014.
- No additional action by policyholders will be required to receive the Firewise discount. Firewise.org has provided a list of participating communities to USAA to compare with their current policyholder database.
Rate filing history:
The Department of Insurance has approved several homeowner and automobile premium rate reductions, filed by the following companies, saving California consumers millions in premiums annually:
- State Farm General Insurance Company reduced statewide rates by 12.6 percent
- QBE reduced lender-placed homeowner rates by 35 percent
- American Assurance Insurance Company reduced lender-placed homeowner rates by 30.5 percent
- American Modern Home reduced lender-placed homeowner rates by 21.3 percent
- Great American Assurance Company reduced lender-placed homeowner rates by 28 percent
- Pacific Specialty Insurance reduced homeowner rates by 21.5 percent
- Unitrin Direct Property & Causality reduced homeowner rates by 14 percent
- Standard Fire Insurance reduced homeowner rates by 6.4 percent
- Travelers Property & Casualty Insurance reduced homeowner rates by 6.2 percent
- Universal North America Insurance reduced homeowner rates by 3.8 percent
- California Casualty Indemnity reduced automobile rates by 21.7 percent
- USAA General Indemnity reduced automobile rates by 20 percent
- Twin City Fire Insurance reduced automobile rates by 13 percent
- Hartford Underwriters Insurance reduced automobile rates by 8.4 percent
- Progressive West Insurance reduced automobile rates by 6.5 percent
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $289 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $394 million in claims and premiums. Please visit the Department of Insurance web site at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.HELP or 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.