Good News For Safe Drivers In Florida, According to Response Insurance
22 September 1999
Good News For Safe Drivers In Florida, According to Response Insurance MIAMI, Sept. 22 -- When it comes to auto insurance, many safe
motorists in Florida have very little to show for the care and responsibility
they exercise behind the wheel.
While there are surely more expensive places in which to insure a car,
Florida still ranks in the top third nationwide -- 16th among the 50 states
for the average expenditure for car insurance, $759, according to 1997
statistics from the Insurance Information Institute.
Response Insurance is prepared to do something about that. Response is now
offering car insurance coverage directly by phone to good drivers in Florida
-- without agents who charge commissions.
How much difference can Response Insurance make to South Floridians? A 45-
year-old Hialeah couple with good driving records would pay Allstate $1,662
annually to insure a 1997 Ford Taurus LX; they'd pay State Farm $1,496; and
they'd pay Response Insurance $1,040* -- and save as much as 38%.
Many insurance companies lump good drivers in with bad drivers, whose
accidents drive up the rates of people who in some cases have never even been
involved in a fender-bender.
"Right now, good drivers with other insurance companies aren't really
being rewarded for their good driving. They're subsidizing somebody else,"
says Mory Katz, president of Response Insurance. "Response Insurance is for
responsible people."
Because Response Insurance focuses on those with clean driving records,
and since it sells directly to the public -- there are no middlemen charging
fees for the writing of the policies -- rates for auto insurance can be
substantially lower.
Response Insurance has more than just a great concept. It has rock-solid
financial backing. The firm recently received $92 million in completion of its
original equity financing commitment of $215 million. It also received a
commitment for an additional $100 million of equity financing to be completed
at year-end. The total financing package of $315 million was arranged by
Morgan Stanley Dean Witter (MSDW) Capital Partners. The funds will be used to
continue to expand the fast-growing auto insurance writings of the company's
subsidiaries, now operating in New York state, California and Illinois, as
well as Florida.
The investment group arranged by MSDW Capital Partners includes Morgan
Stanley Capital Partners III, L.P., The Plymouth Rock Company, and other
institutional investors. MSDW Capital Partners is the private equity unit of
Morgan Stanley Dean Witter & Co., the global financial services firm.
Employing the logo of a little red telephone on wheels as a visual
reminder of accessible customer service and responsible driving, insurance
entrepreneurs James Stone and Peter Wood launched Response Insurance in 1996,
convinced that the market for direct auto insurance in the United States --
already being tapped by companies such as GEICO and USAA -- was ready for
growth.
Figures cited in the Feb. 23, 1998, issue of Forbes magazine confirmed
their conviction.
A study by Conning & Co., cited by Forbes, projects that direct sellers'
share of the auto insurance market will climb to 17.2 percent in the year 2000
-- up from 12.8 percent a year ago.
Stone is the founder of The Plymouth Rock Company, which operates several
regional insurance carriers in New England. Wood is the founder of Direct Line
Insurance, the first direct response carrier in the U.K. and now the country's
largest auto carrier. Response Insurance is headquartered in White Plains,
N.Y., and also has offices in Suisun City, Calif. To find out more, call
888-733-7466 (RED-PHONE), or visit http://www.responseinsurance.com.
* Comparative premium quotations are based on publicly available
information regarding rates on 5/15/99. Response Insurance makes no warranties
concerning the information of other companies. Response Insurance has used
reasonable care in providing premium quotations; however, other factors may
influence rates. Competitors' rates may have changed since printing. All
applications individually written. Response Insurance reserves the right to
withdraw an offer of auto insurance if it is determined that consumer does not
meet the selection criteria used for an offer, or consumer does not meet other
applicable criteria for insurability with Response Insurance. Actual premium
charged will vary based on driving record, vehicle type, usage, address and
other factors. Sample for a married couple 45 years old, no accidents or
violations in prior 5 years, prior insurance (standard company), signed safety
pledge, licensed more than 3 years. 1997 Ford Taurus LX four door sedan, dual
air bags, pleasure use, 8,000 annual miles. 100/300/50 Bodily Injury/Physical
Damage, non-stacked Uninsured Motorist, Basic PIP, Comprehensive and Collision
($500 deductible) for 12-month premium rounded to the nearest dollar at a
location within the 33012 zip code.
