Mercury has filed for an overall renters insurance rate reduction of 33% and homeowners rate reduction of 10%. Poizner also announced that he has approved a rate reduction of 3% for Mercury auto insurance policyholders. These reductions will total $61 million in savings for California policyholders.
"This is great news for Mercury auto insurance policyholders, who are already beginning to reap savings from this rate cut," said Poizner. "I look forward to the tremendous savings thousands of Californians will be able to enjoy on their homeowners and renters insurance premiums under this reduction. Mercury is exemplifying consumer-friendly and smart business practices by passing company savings on to their policyholders. I'm very pleased to enable Californians to keep more of their hard-earned money."
"Mercury focuses on providing our customers with the best insurance value possible through a combination of the best protection, personalized service and low rates," said Joseph. "And now, our rates will be even lower, which is good news for consumers. Faced with skyrocketing food and gasoline prices, Mercury's policyholders won't have to worry about the cost of their insurance."
Mercury insures 20,000 rented dwellings in California - 14,000 of which are located in Southern California. Policyholders will save a total of $1.5 million each year under the rate reductions Commissioner Poizner intends to approve. The average California renter will save approximately $80 per year. Southern California renters will save approximately $85 on average per year.
Forty percent of Californians rent, which is one-third more than the national average. During the first quarter of 2008, 47,171 homes were lost to foreclosure in California, according to DQ News. As an increasing number of families lose their homes, many are forced to rent. Mercury's reduction will help families impacted by the housing crisis by offering more affordable rates. At the same time, in a competitive market like California, this rate reduction helps to put pressure on other companies to lower their rates.
Mercury insures 224,000 homes in California, 166,000 of which are located in Southern California. Under the reduced homeowners rates the Commissioner intends to approve, policyholders will save $18.5 million per year - an average of about $83 per home statewide, and about $100 per home for Southern Californians. Renters and homeowners savings are expected to go into effect in mid-August.
As the third largest auto insurer in the state, Mercury insures nearly 1.5 million California vehicles, 1.1 million of which are Southern California vehicles. Under the newly approved reduced rates, California Mercury auto policyholders save an average of about $30 per vehicle, per year - a total of $41 million.