New York Superintendent of Insurance Gregory Serio announced on Thursday that GEICO auto insurance customers in New York State will see an across-the-board rate reduction in 2005 resulting in a savings of 6 percent for a typical policyholder. GEICO’s decision will reportedly save existing private passenger vehicle policyholders more than $100 million.
“Thousands of New York drivers are going to benefit financially from these across-the-board rate reductions and we welcome GEICO’s cooperation,” Serio stated. “The favorable trends that allowed GEICO to take this step are the result in large part of regulatory reforms designed to combat no-fault auto insurance fraud, a multi-year effort that is now starting to pay off.” The new GEICO rate structure goes into effect on Jan. 1, 2005 for first-time customers and starting on Feb. 15, 2005 for those that are renewing existing policies.
A direct writer, GEICO has more than 950,000 private passenger vehicle policyholders in New York State, which translates into about 15 percent of the state’s total market share as of December 2004.
Serio last month asked GEICO and 12 other auto insurance carriers cumulatively serving more than 60 percent of the state’s drivers to meet with him to discuss possible rate reductions in light of industry data indicating that losses had dropped substantially between 2002 and the third quarter of 2004.
“By taking this dramatic step, GEICO is saving their New York State customers tens of millions of dollars through actual changes to their rate structure, not just dividends,” Serio stated.
In addition, GEICO sought and received Insurance Department approval to alter its internal tiered rating system, a move that will link their customers’ improved driving performance with lower premium rates and reportedly result in even more consumer savings. GEICO has also agreed to submit another rate filing later in 2005.
Meetings with other carriers are continuing.
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