Thousands of Georgia drivers could see substantial increases in their auto insurance rates -- as much as 81 percent, for some -- as insurance companies begin setting their own rates under a law that took effect Oct. 1.
WHO'S GOING UP?
Nineteen insurance companies have set new rates that renewing or new customers will encounter, with 14 enacting average increases between 2 percent and 11 percent, according to the state Insurance Commissioner's Office.
The increases are much higher for certain drivers. A 28-year-old man with a DUI conviction, an accident or other violations who is insured through Central Mutual Insurance Co. can expect his rate to climb 81 percent.
Drivers insured through 21st Century Insurance Co. will see their rates climb at least 9 percent, on top of a 7.5 percent increase the insurer received in August, when the state still had authority to review and approve insurance rates beforehand.
"We're seeing a lot of companies coming in with very significant swings," Insurance Commissioner John Oxendine said.
The largest increases, between 24.5 percent and 81 percent, would affect about 60,000 drivers.
Six of the companies raising rates, including 21st Century, are owned by underwriting giant American International Group, or AIG, which is in line for a multibillion-dollar government bailout. AIG officials did not respond to a request for comment.
WHO'S NOT GOING UP?
Four companies will reduce their rates by a fraction of a percentage, including State Farm Mutual Automobile Insurance Co., the state's largest insurer with 1.4 million policies. Lincoln General Insurance Co. will cut rates the most, by 10 percent.
WHY DID THE LAW CHANGE?
When state lawmakers debated the law, supporters said allowing insurers to set their own rates would spur competition and improve prices for consumers. It passed the House and Senate with only 13 votes against it.
Mr. Oxendine fought the change, which was added to a bill allowing drivers to bolster their coverage against uninsured motorists.
Mr. Oxendine said Friday that he doubted the law would ever increase competition.
"These companies can come back every couple of months and raise rates if they want to," Mr. Oxendine said. "I think the key is going to be what happens over the next year."
Sen. Jeff Chapman, R-Brunswick, voted against the bill. He said he hoped rates would eventually be driven down.
"You obviously don't want to see anybody get taken advantage of," Mr. Chapman said.