In a time when most insurance companies are raising rates on their property coverage, USAA is lowering theirs. Policyholders in California will see their rates drop an average of 15%. The rate change has been approved by the California Department of Insurance and is being lauded as a move to ease the financial burden of individuals and families struggling with a troublesome economy.
Insurance Commissioner Dave Jones was particularly elated at the news as he has spent the better part of this year battling the state’s insurers regarding proposed rate hikes. USAA reports that the rate decrease is possible due to “favorable trends in claims costs.”
Overall, the 15% reduction in rates translates into $40 million in savings annually, or $185 per home. The new rates will not be active until November 30th of this year, but policyholders can expect to see renewal packets in the mail by late September.
USAA has not changed the rates of their property insurance since 2006, when rates were lowered by 22%. Several other insurers have also reduced their rates but not as prominently as USAA. The new rates will affect some 200,000 policyholders in California.
The company’s move to lower their rates is in stark contrast to a trend sweeping the nation that sees many big name insurers pushing for higher insurance rates. Given the occurrence of natural catastrophes and a changing health care landscape, insurance rates have been something of a rollercoaster lately.