State Farm Mutual Automobile Insurance recently announced it would cut down its car insurance prices in Virginia after reducing auto insurance prices in Arizona and Louisiana. This price cut is the company’s second in two years.
Because of this move, the insurer’s overall personal auto rate will decrease by 4.9%. Experts expect this rate reduction to result in a $39 million impact in Virginia. The state experienced its last insurance rate drop last June with a 2.9% decrease, according to a report in Fredericksburg Free Lance-Star, a local paper.
Earlier, the company has set to lower its car insurance rates in Arizona and Louisiana aimed to serve its customers in these areas better. Customers in these states will see their rates decrease by 3% (Arizona) and 3.2% (Louisiana). However, changes in premiums for individual policyholders will still vary based on the specific details of the policy and selected coverages of a single customer.
In Arizona, State Farm has reduced car insurance rates by more than 6% in 2018, resulting in over $42.1 million in savings, the AZ Business Magazine reported. Meanwhile, The Times-Picayune in New Orleans said State Farm’s overall rates are 7.7% lower than it was in June 2018 since it launched a series of cuts last summer.
The insurer’s financial position and the present business and economic climate were among the key factors that bolstered the company’s decision for the rate change, State Farm area vice-president Sonya Robinson said regarding the Arizona rate slash.
State Farm’s price cuts in 2018 have put pressure on its rivals like Allstate, Geico, and Farmers. These companies faced a dilemma of following State Farm’s move at the expense of their profitability or maintaining their rates at the risk of losing market share, Brett Horn, an industry analyst at Morningstar in Chicago, said.