Sponsored by:

Comment, blog & share photos

Log in | Become a member
The Honolulu Advertiser

Posted on: Saturday, April 13, 2002

State Farm to raise rates

By Frank Cho
Advertiser Staff Writer

The state's largest auto insurance company is preparing to announce its first rate increase in more than 10 years — a move that will cost Hawai'i drivers nearly $6 million annually.

State Farm Mutual and its affiliate State Farm Fire and Casualty Insurance will increase rates by an average of 6.9 percent and 7.3 percent, respectively. The increases will be announced Monday and become effective May 15, affecting about 120,000 drivers statewide.

The company last raised rates in October 1991.

State Farm attributed the new increases to higher medical and car repair costs.

"What people pay individually will depend on where they live, the coverage they carry and how they use their cars," said Carolyn Fujioka, a spokeswoman for State Farm in Honolulu.

Fujioka said that the state insurance division has already approved the rate increase and that State Farm planned to post the notice on its Web site, StateFarm.com, on Monday. The state insurance commissioner could not be reached for comment last night.

State Farm Mutual, which covers the majority of drivers for the company, said personal-injury protection will see the biggest increase at 44.7 percent. The so-called PIP coverage is a component of the overall auto premium. Collision will rise 10.8 percent; emergency roadside service, up 9.1 percent. Uninsured Motor Vehicle coverage will drop 5.1 percent.

State Farm Fire and Casualty, which covers drivers who cannot qualify for coverage under State Farm Mutual, will raise rates on its PIP coverage 43.3 percent. Coverages for emergency roadside and collision will rise 10.3 and 9.5 percent, respectively.

State Farm said it based the rate increases on data from the previous 3 1/2 years of claims.#034;With this increase, rates are still 31 percent lower than they were in 1997," Fujioka said. "If you look at rates over a long period of time, you do see increases and decreases and we had been on a downward trend for some time."

State Farm reduced its rates several times since 1997, most recently in February 2001 when it cut its rates an average of 9 percent.

Fujioka said that while it's hard to know for sure, the company is not contemplating reducing auto insurance rates for the foreseeable future.

Reach Frank Cho at 525-8088, or at fcho@honoluluadvertiser.com.