A San Francisco Superior Court judge on Thursday ordered Allstate Insurance to comply with a regulatory order to lower annual auto insurance rates by an average of $133 per vehicle.

The ruling means that Allstate must comply with the order issued in March by the state Department of Insurance to lower rates an average of 15.9 percent. That works out to an average per-vehicle premium dropping from $834 to $701 based on calculations by a consumer group derived from Allstate data. The lower rates apply to renewals as well as new policies taken out after Monday.

Allstate filed an appeal to stop the rate reduction, which is being defended by state officials and a consumer group. The judge’s action denies Allstate’s request for a stay to keep their current rates in place while the appeal is being considered.

The ruling comes on the same day that the Consumer Federation of America released a report finding that California ranked first among all states for holding down auto insurance premiums, thanks to Proposition 103, the 1988 insurance reform initiative passed by voters.

California auto insurance premiums increased an average of 12.9 percent from 1989 to 2005, going from $747.97 to $844.50, the report said.

After the court ruling, Allstate said in a statement that the rate reduction was "neither fair nor reasonable" and that the judge’s denial of the stay "has no impact on the merits of Allstate’s appeal."

Consumer Watchdog, which used to go by the name the Foundation for Taxpayer and Consumer Rights, praised both the judge’s ruling and the Consumer Federation report.

"This just confirms what (the report) concludes: that Prop. 103 regulation of insurance companies has saved California consumers hundreds of dollars each year in their auto insurance alone," said Harvey Rosenfield, Prop. 103 author and founder of Consumer Watchdog.
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Eve Mitchell covers personal finance. Reach her at 925-952-2690 or [email protected]