HomeInsuranceAllstate hikes prices 30% in California

Allstate hikes prices 30% in California

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.”

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