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Erie Insurance makes astounding promise: No rate increases

Imagine if your car insurance company allowed you to lock in your rates for as long as your policy was in force, with a guarantee that your price would change only if you add or remove a vehicle, change drivers on your plan or change your address.

That's what's being offered now to drivers in Pennsylvania -- as well as a handful of other states -- through a one-of-a-kind insurance program called "Rate Lock" from Erie Insurance.

 Erie Insurance Rate Lock"In this economy, where your gas is going up and your milk is going up, this is a very attractive option for the budget-minded customer or the customer on a fixed income," says Ann Zaprazny, senior vice president at Erie.

"It gives the customer the opportunity to lock in the rate indefinitely, and they know that their car insurance pricing will remain constant until they change the drivers, change the vehicle, or move," she adds.

Erie’s Rate Lock is new in Pennsylvania as of August, but it was rolled out nearly two years ago in eight other states -- Illinois, Indiana, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and Wisconsin – and Washington, D.C.

In three other states where Erie does business -- Maryland, New York and North Carolina -- Rate Lock has not yet been approved by state insurance commissioners.

Going the extra mile

Recently, car insurance companies have been successfully luring drivers with the promise of "accident forgiveness." It’s a pledge to keep auto insurance rates level, even after a first crash.

Rate Lock protects you from increases due to accidents and also from inflationary increases that often come at renewal time.

Still, Rate Lock has fine print.

For starters, you have to pass the company's underwriting guidelines to qualify -- and Erie typically insures customers with good driving records. But Zaprazny notes that the company does provide auto insurance quotes and coverage to those who have accident histories or blemishes on their motor vehicle reports.

Additionally, Rate Lock could be more costly than a standard car insurance quote from Erie. Zaprazny says company statistics show that in 25 percent of cases, customers are paying more for Rate Lock -- roughly $25 to $75 more annually -- depending on the customer and his or her driving history.

"Customers value consistency and predictability," Zaprazny notes. "So the response to Rate Lock from our customers has been very positive."

Selling the concept online

As part of the rollout of the Rate Lock product in Pennsylvania, Erie has launched DontPunishMe.com to highlight to consumers that they won't be penalized for fender benders and crashes.

Erie says other car insurance companies have nothing exactly like Rate Lock. For those who are skeptical about overpaying if car insurance quotes later drop, Zaprazy says there’s no need to worry.

"At the end of the day, the customer is ultimately in control," she says. "If they purchase Rate Lock, they can always cancel it and we'll re-rate it" if rates drop.

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