The Impressive Insurance Advertising

By Author: Mitch Velez
Total Articles: 1
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Progressive Insurance Co. on Friday agreed to rebate $51 million to California auto policyholders and to cut rates by 15% for certain kinds of coverage, in a Proposition 103 agreement with the state Department of Insurance.

The company, a unit of Progressive Corp. of Mayfield Heights, Ohio, becomes the third California insurer--after the Automobile Club of Southern California and Mercury Insurance Co.--to agree to the rollbacks approved by California voters in a 1988 referendum. Progressive will rebate an average of $200 apiece to the 260,000 holders of policies written between November, 1988, and November, 1989. The rebate checks are to go out in August, Insurance Commissioner John Garamendi said.

Besides the rate cuts for certain kinds of coverage, Progressive also agreed to refrain from asking for any new rate hikes for 12 months.

However, the agreement allows Progressive to retain interim rate increases approved since November, 1988.

Prop. 103 promised a 20% rollback in automobile and homeowner insurance premiums, but the rebates have been slow in coming because the voter action sparked a series ...
... of legal wrangles. The state Supreme Court upheld Prop. 103 but ruled that insurance companies cannot be denied a fair rate of return.

The $51-million rollback announced Friday is 29% less than the $71.9 million that Garamendi originally ordered Progressive to pay last October. As was the case with Mercury, which agreed to a $46-million rollback May 28, the amount was reduced in discussions between the company and insurance regulators before an administrative law judge.

Mercury said its rollback would cause it to take a one-time charge against earnings of $20.3 million, or about $1 a share.

Progressive, however, said that as of the end of this year's first quarter, it had reserved $153.3 million against potential Prop. 103 liabilities.

Known as Progressive Insurance Girl or Progressive Girl, the actress, and part time comedian Stephanie Courtney has made a lasting impression amongst television watchers all over the United States.