"Sky is Falling" Tactics by Auto Insurance Industry Not Proving True
American Family files for mere 1.8% rate increase despite attempts to scare public
Claims by the auto insurance industry, that rates will increase between 30 to 40 percent because of pro-consumer changes made in the state budget are proving to be all spin as companies file their proposed rate increases with the Office of the Commissioner of Insurance.
"On October 22, American Family Mutual Insurance Company filed its proposed rate increases for 2010 for personal auto insurance policies and has projected a mere 1.8% overall rate increase for policyholders," said WAJ President Mark Thomsen.
American Family is the largest provider of personal auto insurance in Wisconsin with nearly 1 million policyholders.
Thomsen added, "While American Family does point out that some policy items may affect rates, the increases to uninsured and underinsured coverages are some of the least expensive policies consumers can buy. Most Wisconsin policyholders already carry more than the new minimum levels of insurance; because they know the minimum levels often do not provide the level of protection they need to protect themselves and their family."
"Once again you just can't trust insurance companies to be honest with the public. They are mad because the Legislature closed some loopholes they were able to sneak into the law a few years ago to deny thousands of policyholders coverage they paid for and pocket the profits," explained Thomsen. "At every step in the process an army of insurance industry lobbyists has predicted giant rate increases and we are only now seeing the extent of their scare tactics."
"American Family, like some other insurers, sent ominous sounding notices to some policyholders telling them that because of action taken in the Legislature they will be forced to raise rates, but did not include how much it would cost those persons to move to greater coverage. This was an obvious political move to scare policyholders without cause," noted Thomsen.
Attached to this press release is one such notice sent. A follow up call to the policyholder's agent revealed that to increase his medical coverage from $2,000 to the new minimum of $10,000 would cost only an extra $6 per vehicle per year. "For an extra $6, he will now get 5 times the coverage for medical care - a great benefit," said Thomsen.
"In the end the solution for consumers is simple - if your rates go up, shop around. With hundreds of choices I know you will find a better deal," concluded Thomsen.
See the rate filing at: https://ociaccess.oci.wi.gov/Companyfilings/document?docid=155925&filid=167941
Mark Thomsen is the President of the Wisconsin Association for Justice. The Wisconsin Association for Justice stands with consumers to promote a fair and effective justice system for every citizen, not just the privileged and wealthy.