State Farm Mutual Insurance Company trimmed its overall auto insurance rate level in Minnesota by an average of .7% and in Wisconsin an average of 2.3%, both effective May 1. In Illinois it reduced auto rates by an average of 5.4%, effective June 1.
In all three states the company also introduced a multiple line discount of 5% on some auto insurance coverages for customers who also have State Farm homeowners, health or life insurance. The company also increased the discounts it gives to customers who remain accident-free for 10 years or longer--from 15% to 20%.
In Minnesota, on average, auto premiums for comprehensive and liability coverages will drop, personal injury protection premiums will rise and collision coverage will remain unchanged.
State Farm Mutual's most recent auto insurance rate change in Minnesota was a 3.5% average increase April 1, 1996.
In Wisconsin prices for comprehensive and liability coverages will drop on average, and premiums for other coverages will stay the same.
The last previous auto insurance rate change in Wisconsin was an increase averaging .8%, effective November, 15, 1995. The company also returned about $11.7 million in dividends to its Wisconsin auto insurance customers from 1992 to 1994.
In Illinois State Farm's premiums for comprehensive, liability, collision and uninsured motorist coverage will drop on average, while premiums for medical payments will rise.
The company's last previous auto rate change in Illinois was an increase averaging 4.8%, effective March 1, 1995.
In all three states, overall changes in premiums for individual motorists will vary, depending on the coverages they carry, where they live, the kind of car insured, who drives it and how much it is driven.
Indiana
NAII and AIA applaud passage of pollution exclusion bill
The National Association of Independent Insurers (NAII) and the American Insurance Association (AIA) praised the passage of HB 1583 by the Indiana House of Representatives, which preserves the standard absolute pollution exclusion as a tool for insurance companies to define what risks are and are not covered.
Last year the Indiana Supreme Court found both the 1970 Insurance Services Office pollution exclusion and the 1985 ISO pollution exclusion contained in several garage insurance policies to be "ambiguous" as applied to a gasoline leak from an underground storage tank at the policyholder's gas station. Thus, liability for environmental clean-up was effectively shifted from the polluters to the insurance industry. No other court in the United States has found the exclusion to be ambiguous, according to the NAII.
"By passing this bill, the House preserves the enforceability of language that has been, up-until-now, held to be crystal clear throughout the rest of the country," said Robert Hurns, NAII associate counsel. "Policies or contracts containing pollution exclusion language simply do not cover pollution; it's as simple as that."
Hurns further noted that passage of this bill should send a message to the Supreme Court that the role of the court is not to alter contracts. "The courts should only interpret a contract if the language is unclear," said Hurns. "In general liability policies containing the absolute pollution exclusion, it can't get much clearer than an absolute exclusion."
According to Fred McGarvey, regional vice president of the American Insurance Association, "This legislation preserves stability and reliability for the Indiana insurance market. The bill is a victory for everyone in Indiana from insurers to business to consumers."
The bill now goes to Governor Frank L. O'Bannon who is expected to sign it.
Ohio
State Farm revises auto, homeowners rates
State Farm Mutual reduced auto insurance rates in Ohio by an average of 4.5% effective March 1, and is offering new discounts for auto insurance customers who also have State Farm homeowners, life or health insurance.
Meanwhile, State Farm Fire and Casualty will introduce a revised and simplified homeowners policy and, at the same time, will increase homeowners rates statewide by an average of 5.5%.
The company is introducing a 5% multiple-line discount on some auto insurance coverages for State Farm Mutual customers who also have State Farm homeowners, life or health insurance.
The revised and simplified homeowners insurance policy allows all who insure their homes to 100% of replacement cost to be given the opportunity to have the broadest coverage available. Previously, homes had to meet certain requirements in order to be eligible for a full package of coverages.
The HO changes took effect March 1 for new policies and May 1 for renewals of existing policies. The new policy went into effect on the same schedule.
A revised discount is being introduced to give home owners who have newer utilities the ability to chop up to 25% off their rates. This can be done by buying a newer home or upgrading utilities in an existing home. The new discount replaces a discount of up to 20% based solely on the age of the home.
State Farm, Ohio's largest insurer of homes, with 636,000 policies, last raised homeowners insurance rates in Ohio by an average of less than one-half of one percent effective March 1, 1996. *