California car insurance rates, costs are on the rise

CALIFORNIA, USA — Consumers are seeing rate increases on their car insurance and having difficulties finding a company that will take them on here in California.

A Rancho Cordova woman was shocked when she looked at her car upcoming car insurance bill.

“They were going to raise it more than double than what I was originally paying,” said Christina Habib. “I was like, ‘Oh my God, that can’t be right,’ so I went home and I opened up GEICO again and I was like, ‘No, that is what’s really going on.'”

Habib’s monthly payment increased from $136 to nearly $360 for car insurance through GEICO.

“I contacted them right away and the woman’s explanation, which was on a virtual chat, was that it was inflation, that the auto rates were going up,” Habib said.

The new rate would increase her insurance by more than $2,600 for the year.

“It is very hard. I depend on my car quite a bit,” Habib said.

“We’re seeing most, if not all, companies requesting rate increases,” said Harold Newbill, owner of McClatchy Insurance Agency.

Newbill said some companies have decided to cancel customers or reduce insurance offerings in California.

RELATED: State Farm ceases accepting new homeowners insurance applications in California

ABC10 asked Newbill what is contributing to this change in recent years, and he said, for one, inflation.

“Along with that has come the cost to repair vehicles, the cost for parts to do that and the rise in higher payments in claims for car accidents and that’s related to the cost of healthcare,” he said.

ABC10 reached out to the California Department of Insurance about the rate increases. In a statement to ABC10, the department said they are working to “keep insurance rates fair and affordable while improving the availability of insurance throughout the state.”

They added that department experts thoroughly analyze each company’s rate request to make sure they are “compliant with California laws and fully justified.” A full statement is available at the end of this story.

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There are some ways consumers can save on their insurance bill. Newbill said you can ask to take a safe driving course to get a discount, look for good driver discounts or change your deductible to have a lower monthly payment. Newbill said the best way to save is to drive safe.

“If you have claims for any type, if you have speeding tickets, it’s going to be very tough for you to find insurance and it’s going to be very expensive,” Newbill said.

California also has a program to help low income residents afford auto insurance. It’s called California’s Low Cost Auto Insurance program. To qualify, residents must meet income eligibility guidelines, have a valid California driver’s license and have a good driving record. For more information about the program and to see if you qualify, click here.

ABC10 also reached out to GEICO about the rate increase, but they have not yet responded to the request. 

The full statement from the California Department of Insurance to ABC10 is available below.

“Commissioner Lara is committed to using every tool to keep insurance rates fair and affordable while improving the availability of insurance throughout the state. He is driving a comprehensive strategy to improve options for homeowners and businesses who are experiencing the negative impact of outdated regulations and higher losses from winter storms and wildfires. While insurance companies request rates to cover future losses, the Department’s experts take the lead in thoroughly analyzing each so each insurance companies rate filing is compliant with California laws and fully justified. Our oversight has saved Californians billions of dollars in auto and home premiums.”

RELATED: State Farm raising insurance rates 20% for California customers in new year

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