American Family to Cut Policy Rates in Nebraska

By Steve Jordon

American Family Insurance Co. of Milwaukee will lower auto and homeowner policy rates for most Nebraska customers Oct. 15, mostly because of reduced claims.

The reduction in auto premiums will average 6 percent, cutting overall premiums in the state by $4.8 million a year. Individual rate changes will vary by geographic area, coverage, type of vehicle and other factors.

For homeowners, the reduction will cut premiums by $1.3 million a year through a 3-percentage-point increase in the discount for remaining claims-free for at least five years. Most customers qualify for the discount, which increases as claims-free years increase.

Several other insurers have decreased auto and homeowner rates in the past year, citing lower claims and reduced injuries thanks to seat belts and other factors.

American Family spokesman Ken Muth said the company did not change overall auto insurance rates for Iowa customers this year but cut Iowa homeowners’ premiums by an average of 7 percent on Sept. 1.

He said Nebraska and Iowa auto insurance customers have filed fewer and less-expensive claims, and the company has reduced its internal costs.

Nebraska customers with policies that cover damage to vehicles will see most of the auto insurance decrease, while the cost of liability coverage for injuries and uninsured motorists may increase due to rising medical costs and other factors, he said.

The higher discount rate for homeowners is intended to reflect the likelihood of customers filing claims, Muth said. People who have not filed claims in at least five years are less likely to file future claims than other customers.

American Family insures about 14 percent of Nebraska’s homeowners and about 11 percent of its autos, second in the market behind State Farm Mutual Insurance in both categories.