The largest auto insurer in the country has been reducing its rates in response to the trend.
State Farm car insurance rates have been reducing across the country due to the trends relating to the COVID-19 pandemic. Some of the insurer’s latest data has made it clear why it has been willing and able to make these reductions.
Since the pandemic crisis began, the number of miles driven by Americans has plummeted.
As a result, there have been far fewer State Farm car insurance claims, meaning the coverage is more affordable for the insurer to provide. This has allowed the insurer and its affiliates to drop rates across the country with an average national rate reduction of 11 percent.
The company has introduced a temporary premium adjustment factor that will “apply to all private passenger auto and motorcycle policies, except for antiques and classics, named non-owner, use of non-owned car coverage, or fleets,” read a new review of publicly available rate filings the insurer submitted to state insurance departments.
The company’s filing did not include a deadline by which the adjustment will be ceased. That said, it has made it clear that the adjustment will either be modified or entirely eliminated at some time.
The reduction in State Farm car insurance claims fell phenomenally when the lockdowns began.
The first several weeks after the pandemic was declared led to a significant nosedive in State Farm’s claim volume. This differed from one state to the next. That said, the insurer said that from March 20 to May 2, there was a 26 percent to 56 percent reduction in the number of claim s it received when compared to the numbers from the first 14 days in March 2020. The company used those first two weeks as a baseline against which to compare figures occurring after the pandemic was declared.
That said, as lockdowns and stay-at-home orders were reduced and people started heading back onto the roads, the insurer said the claims started rising, too. That said, the company still predicts that the claims won’t rise to the levels they had reached before the onset of the pandemic.
For instance, its New York data showed that the average daily State Farm car insurance claims will be 13 percent lower than they were during the baseline period by August 31 when the filing for new and renewal business becomes effective.