CAPITOL Geico withdraws auto insurance rate increase BY RICHARD RICHTMYER The Associated Press
Geico, New York’s biggest auto insurer, is holding the line on rates. The company has withdrawn a rate increase request for most of its customers in the state after regulators questioned how higher gas prices are reducing auto travel, Insurance Superintendent Eric Dinallo said Wednesday. The withdrawal came after the state Insurance Department asked the company to justify its proposed rate hike in light of the reduced traffic on New York roadways, he said. He cited federal data showing that New Yorkers drove 500 million fewer miles in May than in the same month last year. “They very quickly went back and said they’re withdrawing their rate request,” Dinallo said. A Geico spokeswoman, Christine Pascher, said the company would have no comment on the New York rate request. The company currently has about 20 percent of New York’s $10 billion auto insurance market, according to the Insurance Department. It had asked for rate increases for 75 percent of its customers in the state. Regulators expect the company to also reduce its proposed rate increase for the rest of its customers, who are in a pool of higher risk drivers, Dinallo said. Auto insurers must have the insurance department’s approval before raising rates, and it currently is considering 48 rate increase requests averaging 7 percent. On Wednesday, the department told all those insurers that they must submit a separate report assessing the impact of gas prices on driving habits. Dinallo said less driving likely means fewer accidents and lower claims costs, and those savings should be passed on to consumers. He expects other insurers to follow Geico’s lead and either hold the line on rates or propose smaller hikes. But any relief for New York drivers — who pay the third highest insurance rates in the county — could be muted, said Bob Hartwig, president of the Insurance Information Institute. While the number of insurance claims filed in the first three months of this year was roughly the same as the same period last year, the cost of those claims continued to rise, Hartwig said. The idea is that while fuel prices have reduced the number of miles people are driving, they’ve also driven up the costs of car parts, towing services and everything else involved in making repairs, he said. Hartwig also noted that most of the details the insurance department is requesting about the impact of high gas prices has probably been figured into rate requests already. “Insurers are constantly monitoring frequency trends and the factors that influence those trends, whether it’s rising gas prices or the rising price of cars,” he said. “How much you drive is already a factor, and they already include that information in their rate filings.”
New York drivers — who pay the third highest insurance rates in the county
And this comes as a surprise to WHO? This is NYS after all! We better all be careful. With the way insurance companies are going, we may all have to pay more taxes to pay for auto insurance for those who can't afford it! Scary thought, but anything is possible in this great welfare state.
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
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