The caption goes here. The reduction will bring total cuts in the company's rates to 27.6 percent in the past two years, the company said. State Farm is among several auto insurers in Hawaii that have lowered their rates voluntarily in recent years. AIG Hawaii Insurance Co, Allstate Insurance Co., First Insurance Co. and Progressive Auto Insurance have also announced rate reductions.
Insurance companies say they are passing along savings because fewer claims are being filed.
That trend, they say, is a result of air bags and other safety improvements in cars, tougher drunk driving laws, increased attention to insurance fraud, and general cost-cutting measures at insurance companies. But recent cuts have come under the watchful eye of Wayne Metcalfe, the state Insurance Commissioner, who in August threatened to invoke a 1998 insurance reform law mandating cuts of 20 percent to 35 percent if companies didn't take action themselves. Noting sluggish response to the law from insurers, Metcalf issued an order requiring companies to file a plan for new rates by Dec. 15. According to Birnbaum, the auto insurance industry in Hawaii earned a return on net worth of 26.6 percent in 1997, against a national average of 11.7 percent. While changes will vary depending on individual policies, most premiums for collision, comprehensive and uninsured and underinsured motorists coverages are expected to drop, the company said.