Los Angeles Business Journal

Auto Club Agrees to $70 Million Rate Reduction

By Deborah Crowe Wednesday, May 22, 2013

State Insurance Commissioner Dave Jones and the Automobile Club of Southern California on Wednesday announced a roughly 4 percent reduction in auto insurance rates for policies that are written or renewed after July 1.

About 1 million Auto Club auto policyholders are expected to see an average $65 reduction in annual insurance premiums, for a total to $70 million in annual savings over time, the state regulator and the company said. In addition to the rate cuts, several discounts will be added or increased, including those benefitting homeowners, college alumni groups and medical professionals.

Auto Club President Robert Bouttier noted that this was the fourth such reduction in the last nine years, and Jones agreed that the company had a history of being amenable to rate reductions. ”The Auto Club has again stepped-up and put their policyholders’ interests first,” Jones said in a statement.

But Consumer Watchdog contends that Auto Club would not have lowered rates if the Santa Monica consumer advocacy group had not challenged the insurer’s 2012 rate filing, which the group said improperly sought to pass on the cost of "institutional advertising” to policyholders.

An affiliate of the American Automobile Association, the Automobile Club of Southern California, is the state’s fourth largest auto insurer and sixth largest home insurer. Its territory stretches from San Luis Obispo and Kern counties to the U.S.-Mexico border.