Mercury Insurance Group Announces California Automobile Insurance Rate Cuts

The California Department of Insurance has approved the Mercury Insurance Group's reduced rates for auto insurance, effective April 1, 1998, it was announced yesterday.

George Joseph, CEO of Mercury, said the company's loss experience in the bodily injury and uninsured motorist lines over the last year had been excellent.

Joseph recognized that the passage of Proposition 213, which became effective on January 1, 1997, had been fundamental in driving down bodily injury claims.

Proposition 213, authored by California's Insurance Commissioner, Chuck Quackenbush, prohibits recovery of non-economic, or "pain and suffering," awards by drunk drivers or uninsured motorists injured in automobile accidents. Such accident victims are entitled to recover their economic losses. The Proposition received an overwhelming 78 percent approval by California voters.

Joseph stated that a number of other factors had also contributed to a decline over the last several years in the number of bodily injury claims filed and the size of the average bodily injury loss. A new law requiring proof of insurance (AB650) for example, passed by the legislature in 1996 and made effective January 1, 1997, had produced a significant reduction in uninsured motorist claims.

The effectiveness of anti-fraud measures undertaken both by the Company and the Department of Insurance had also been a major factor. Mercury established its very own SIU (Special Investigation Unit) as far back as 1978 to combat fraudulent claims.

The stricter enforcement of drunk driving laws, the greater number of vehicles with air bags, the enforcement of seat-belt laws, and the increased proportion of safer late-model vehicles in the state's automobile population, have all contributed to lower losses, Joseph concluded.