Allstate customers in the Golden State will have to pay more to insure their vehicles with the company.
Company officials announced that California drivers would have to pay 30% more for vehicle insurance coverage, on average. The rate hike was approved in December, officials said during an earnings call.
“This auto insurance rate approval allows us to protect more customers as we work with the California Department of Insurance to improve insurance availability. Our payments to help customers recover from accidents and disasters have increased significantly over the last few years and we need to adjust rates to reflect the cost of providing the protection our customers depend on,” a company spokesperson told KTLA.
The rate hike went into effect on Feb. 7 for new and renewed auto insurance policies.
“Allstate’s sale of auto insurance policies via its website or phone resumed early this month but with an average rate increase of 30%. Some people will see increases as small as 10% and others will be hit with rates going up as much as 55%,” a California Department of Insurance spokesperson to the San Francisco Chronicle.
Last year, the company paused direct sales of new auto insurance policies made online or by phone, however, people could still get policies through agents, the San Francisco Chronicle reported. Now, new policies can be obtained through agents or direct sales.
The latest price increase falls short of the proposed 35% hike the company requested last year. Still, Mario Rizzo, president of property and liability, said during an earnings call that Allstate “met its full rate need and is comfortable with the rate level.”
According to Rizzo, as of Feb. 7, Allstate is “writing business in California again across all channels,” which includes Allstate.com.
The company represents 11% of the market and is the third-largest auto insurer in California. In 2022, the company billed about $46 million in premiums.
California isn’t the only place experiencing rate increases; Allstate approved 14.6% and 20% rate increases for New York and New Jersey, respectively.
Allstate wasn’t the only company to implement rate hikes for California customers. State Farm and Geico were also approved for 21% and 12.8% rate hikes, respectively, the San Francisco Standard reported.
Overall, the average annual car insurance premium went up about 18% from 2023 to 2024 in California, according to a study from Bankrate.com.
Still, car insurance rates can vary by city. In Los Angeles, for example, the average annual cost for premium full coverage insurance is $2,992, 11% higher than the state’s average of $2,688, according to the report.
In comparison, the same type of coverage can cost, on average, $2,539 in Bakersfield, which is 6% lower than the state’s average.
The California Department of Insurance provided this statement to KTLA.
“The Department’s thorough review found that Allstate overstated certain loss projections. The authors of Prop. 103, Consumer Watchdog, agreed to the 30% rate increase on California drivers under the current regulatory structure.”
“Commissioner Lara’s bulletin to insurance companies in December has helped the market for private passenger auto insurance by reminding them of their requirement to write all good drivers. Californians continue to pay less on average for auto insurance than other states. Throughout the pandemic, Commissioner Lara pumped the brakes on rate increases in California and despite rates skyrocketing nationwide, holding increases at the lowest level in a decade and saving drivers $2.6 billion. Even with a return to normal driving patterns, Californians continue to benefit from our oversight of rates.”
FAQs
Allstate customers in the Golden State will have to pay more to insure their vehicles with the company. Company officials announced that California drivers would have to pay 30% more for vehicle insurance coverage, on average. The rate hike was approved in December, officials said during an earnings call.
Is California getting a 30% increase in auto insurance? ›
Allstate customers in the Golden State will have to pay more to insure their vehicles with the company. Company officials announced that California drivers would have to pay 30% more for vehicle insurance coverage, on average. The rate hike was approved in December, officials said during an earnings call.
Why did my auto insurance go up in 2024 in California? ›
One reason is increased costs in other sectors.“The cost to repair vehicles, you know if you think of labor, parts, the cost of fuel to deliver those parts to places, all of those have experienced a lot of increase in the last couple years,” Newbill said.Another reason is that more accidents on California roadways lead ...
Did Allstate raise rates in 2024? ›
Implemented rate increases and inflation in insured home replacement costs resulted in a 12.1% increase in homeowners insurance average gross written premium in January 2024 compared to the prior year,” said Jess Merten, Chief Financial Officer of The Allstate Corporation.
Is Allstate auto insurance leaving California? ›
Allstate stopped issuing new insurance policies for all business and personal property in California back in 2022.
Why are allstates' rates so high? ›
Allstate said its payments to customers recovering from accidents and disasters significantly increased over the past few years, and “we need to adjust rates to reflect the cost of providing the protection our customers depend on.”
Why is car insurance so expensive in California now? ›
Climate change plays a far larger role in the cost of auto premiums than most consumers believe. That's because the effects of this change have been felt throughout California, and they effectively put vehicles in the state at enhanced risk.
Why did my car insurance go up when nothing changed? ›
As unfair as it may seem, you may experience an auto rate increase due to insurance claims data in your ZIP code. If your area has a high rate of theft, accident, or weather-related claims, it becomes riskier for an insurance company to cover drivers there.
Why is my car insurance suddenly so high? ›
While it can seem arbitrary, there are actual reasons you can see your price go up and down. Car insurance rates can change based on factors like claims, driving history, adding new drivers to your policy, and even your credit score.
Why is everyone's insurance going up? ›
Inflation. Nobody in America will be surprised to learn that inflation has spread to all areas of the economy, including car insurance. As vehicles become more expensive to repair and replace, car insurance rates climb as well. The price of both new and used cars has soared over the past few years.
In terms of car insurance costs, Allstate is more expensive than other top competitors like Progressive, Geico and State Farm. In the category of affordability, we rate Progressive 7.8 out of 10.0 stars and Allstate 7.4 out of 10.0 stars.
What is the cheapest car insurance in California? ›
Geico, USAA, Mercury Insurance, Progressive and CSAA are the five cheapest car insurance companies in California, according to our research. The average cost of full-coverage car insurance in California is $193 per month or $2,313 per year.
Is Allstate being sold? ›
NORTHBROOK, Ill., Jan. 26, 2021 – The Allstate Corporation (NYSE: ALL) has agreed to sell Allstate Life Insurance Company (ALIC) to entities managed by Blackstone for $2.8 billion.
Is State Farm pulling out of CA? ›
Starting in July 2024, State Farm will stop insuring more than 30,000 residential homes in California, and starting in August, will discontinue coverage on 42,000 commercial apartment properties.
Is Allstate cheaper than Geico? ›
Comparing Allstate vs. Geico, we found that Geico offers cheaper auto insurance on average. We gave Geico 9.1 out of 10.0 points in the cost category in our industry-wide insurance review, while Allstate earned 7.4 points.
Is Allstate losing agents? ›
As all insurers must do, last week Allstate submitted its annual filing with the Securities and Exchange Commission (SEC). In the report, Allstate noted it now has just 8,400 agents working for the company.
Is auto insurance going up due to inflation? ›
Soaring premiums have become a prominent driver of inflation, and insurers say that more increases could be on the way. How did it get like this? If your car broke down two years ago, it probably became a bigger problem than you bargained for.
Why did my Covered California insurance go up? ›
California's Individual Market Rate Change for 2024
While post-pandemic medical trends — such as increased utilization of health care services, medical cost inflation and labor dynamics — are driving this year's increase, the rates are more than a one-year story.
Why did my insurance go up 25 dollars? ›
Car accidents and traffic violations are common explanations for an insurance rate increase, but other reasons why your car insurance rate can go up include changing your address, adding a new vehicle or driver, increases to claims in your ZIP code, and increases to car repair/replacement cost.
What is 15 30 5 insurance in California? ›
This means the insurance will pay up to: $15,000 for the death or bodily injury of any one person; $30,000 total for the death or bodily liability of all other people hurt the accident; and. $5,000 for property damage (including the other vehicle and stationary objects such as fences).
