California's Largest Property/Casualty Insurer Withdraws Request Rather than Defend It in a Public Hearing
Santa Monica, CA -- A California consumer group has successfully blocked State Farm from overcharging mobilehome owners for their homeowners insurance. Less than three weeks after the nonprofit Foundation for Taxpayer and Consumer Rights (FTCR) filed a challenge with the California Department of Insurance, the insurer has withdrawn its request rather than defend it in a public hearing. State Farm had sought a 21.3% increase in its rates, yet an analysis performed by FTCR indicated that no increase was warranted under Proposition 103, the landmark insurance reform initiative passed by California voters in 1988.
The approximately 40,000 mobilehome owners insured by State Farm will each save approximately $130 per year.
The significance of this development is highlighted by the fact that in 2002 and 2001, State Farm had been allowed to increase its rates by 47.7% and 22.3%, respectively, when FTCR had not challenged the increases.
"When faced with the prospect of having to defend their rate hike, State Farm withdrew it. This is yet another example of Proposition 103 protecting consumers from predatory premiums," said Lawrence Markey, Jr., Staff Attorney for FTCR.
By filing challenges under Proposition 103, FTCR saved California consumers over $200 million in insurance premiums in 2004.