State Farm Insurance customers can expect to receive double-digit decreases in rates for both auto and homeowners insurance, the company and the state's insurance commissioner said Wednesday.

The company, which is the largest auto and homeowners insurance carrier in California, has decided to slash auto insurance rates by 10.1 percent, and homeowners rates by 20 percent, said Lonny Haskins, a spokesman for State Farm.

State Farm had said last September that it was planning to reduce homeowners insurance rates by 10.6 percent.

The rate reductions total about $489 million. About $230 million will be applied to homeowners and renters, and $259 million to drivers, Insurance Commissioner John Garamendi said.

The proposed State Farm cuts should take effect as early as April for the insurer's policyholders, Garamendi said.

"This is good news for millions of State Farm California policyholders and customers," Garamendi stated.

This is the latest in a series of filings for proposed reductions by insurance companies in recent months. Garamendi spent much of 2006 pressuring auto and homeowners insurance carriers to lower their rates.

Farmers Insurance Group, USAA, Nationwide Corp., Safeco Insurance, Hartford, and Kemper had previously announced plans to reduce homeowners insurance rates. Allstate had said it would increase homeowners rates.

For auto insurance, State Farm and Farmers, the two largest auto insurance providers in California, both are planning to cut premiums.

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By George Avalos
CONTRA COSTA TIMES

George Avalos covers the economy, jobs, financial markets, insurance and banks. You can reach him at 925-977-8477 or gavalos@cctimes.com.
 
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