While some carriers have pulled out of California altogether, others have put safeguards in place, such as a 3-week waiting period for issuing new policies.
SAN DIEGO — For insurance companies, providing auto policies has become more expensive due to rising costs for repairs, and some carriers have pulled out of California altogether. CBS 8 is Working for You to find out what effect this is having on auto insurance rates.
“It’s ridiculous, they’re going up like crazy, everything else, you know, like the gas prices, home prices, interest. It’s very hard to make a living here,” said La Mesa resident Nick Stratakos.
With car insurance premiums on the rise, it seems there’s no relief in sight. Driver Gabriel Rasmussen knows about it firsthand.
“Bought a new vehicle, compared it with a couple family members and friends on insurance, and it’s much different than years ago,” said Rasmussen.
So why are rates rising? Much of it has to do with the increasing cost of car parts and repairs.
“17 years ago when I got into the business, a front bumper on a car might $300 to $500 dollars. Now they’re $3,000 to $5,000 dollars because they have cameras in them, they have sensors in them to tell how closely they’re following the vehicle in front of them,” said David Petri, an Allstate insurance agency owner in La Mesa.
Petri’s agency serves more than 5,000 customers, and they’ve noticed an uptick in the number of uninsured drivers, some who have figured out ways to game the system.
“There has been a trend of people who will just get an insurance policy just for the ID card and then they do not make subsequent payments after that because they have the ID card, they have the golden ticket,” said Petri.
While some carriers have pulled out of California altogether, others have put safeguards in place, such as a 3-week waiting period for issuing new policies.
“For a new customer coming on, they either need to pay the policy in full or pay half of the 6-month or annual premiums, or they need to be placed on automated payments out of a checking or a savings account,” said Petri.
To find the best rate, Petri recommends working with your carrier to find ways to lower it or defer payments. For example, if you elect to have a higher deductible, it might lower your premium. Regardless, Petri recommends having uninsured motorists coverage.
“We are in economic turmoil at the moment,” said Petri. “California is not an inexpensive place to live. Insurance is not an inexpensive cost. There are a large number of drivers on the road who are uninsured.”
CBS 8 reached out to the California State Insurance Commissioner’s Office for comment and did not receive a response.
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Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.