Auto insurer Mercury is set to reduce rates for many policyholders in California by at least 10% starting next week.
The Los Angeles-based company announced Thursday that state regulators approved a requested rate reduction for customers who buy a new policy or renew an old one after Dec. 15.
Customers, who currently insure about 2 million vehicles with Mercury, will save an average of $72 a year for each car or light truck, the company said.
The Mercury rate cut is the latest in a series of price reductions by insurers in the highly competitive California market. Last week, the state's two biggest auto insurers, State Farm Mutual and the Auto Club of Southern California, unveiled new "pay-as-you-drive" policies that would allow some motorists to cut premiums significantly if they reduce the number of miles driven each year.
More companies are expected to offer the pay-as-you-drive policies in coming months, said officials at the California Department of Insurance.
Many companies have been cutting premiums in recent years because accident frequency and severity are down, cars have become safer and aging baby boomers are more conservative behind the wheel, industry experts said.
In addition to setting lower rates, Mercury has added new features to its insurance products. One of those, said Robert Houlihan, the chief product officer, is 24-hour roadside assistance for customers who purchase comprehensive and collision coverage that protects them from such losses as fire, theft or accidental body and mechanical damage.
"This represents a tremendous value for our customers because now they don't have to join a club to get the help they need if they run out of gas, need a tow or simply lock their keys in their car," Houlihan said.
Another potential benefit is a special discount for college graduates who are members of alumni associations.