Mercury auto insurance rates will be cut in California by at least 10 percent starting the week of December 13, 2010. Mercury is the fifth largest auto insurance provider in California and insures 2 million vehicles in California, Florida, New Jersey, Texas, Arizona, New York, Georgia, Oklahoma, Illinois, Michigan, Nevada, Virginia and Pennsylvania. It is said that customers of Mercury will save an average of $72 a year for each car or light truck insured. The company has also announced that it will be offering new features, including a 24-hour roadside assistance program, for customers who purchase comprehensive and collision coverage.
Mercury takes the action during a time when a number of auto insurance companies have announced rate cuts in the California market. Earlier in December, State Farm Mutual and the Auto Club of Southern California announced that they would be offering pay as you drive policies. These programs would base the cost of insurance on the number of miles you drive. More companies are expected to adopt similar programs in the not too distant future.
Analysts say that California insurance companies are cutting their rates because the market is highly competitive and the number of accidents and their severity are down. Other reasons for the rate decrease include safer cars and the fact that the aging baby boomer generation is said to be more cautious behind the wheel.
Some who know the California auto insurance market suggest that Mercury’s reasons for a rate cut are due to other issues. Consumer Watchdog, an advocacy group with headquarters in Santa Monica, California, countered that Mercury’s action was due to consumer complaints over the company’s earlier plans to raise its rates. The state regulatory agency had rejected that request.