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
Your particular driver profile, which includes factors like where you live, your age and your driving record, influences what you pay for car insurance. But rising car repair costs and an increase in disaster-related claims are significant reasons why car insurance rates are surging for many drivers.
Why did my auto insurance go up in 2024 in California? ›
Your particular driver profile, which includes factors like where you live, your age and your driving record, influences what you pay for car insurance. But rising car repair costs and an increase in disaster-related claims are significant reasons why car insurance rates are surging for many drivers.
Did car insurance rates go up in California? ›
Allstate stopped issuing homeowners insurance policies to new customers in California in 2022, and stopped directly selling new auto insurance policies in the state. The company decided to return but only after regulators agreed to let it raise auto insurance rates by an average of 30%.
Why did Allstate rates go up? ›
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.
Why is Allstate insurance so expensive? ›
Many factors contribute to Allstate being expensive, including rising costs for insurance companies and the way it pays its agents. Damage claims and payouts also factor into its higher-than-average rates.
Why did my car insurance go up when nothing changed? ›
The collective risk factor
You are particularly affected by where you live and the people directly around you. If you live in an area where there is a lot of car theft or a higher number of accidents, your insurance company may assume there is a higher risk that you will also have similar claims.
Why is my car insurance suddenly so high? ›
Car insurance rates can change based on factors like claims, driving history, adding new drivers to your policy, and even your credit score.
Is Allstate auto insurance leaving California? ›
Non-renewal notices to more than 12,500 customers affected will start being mailed out in July. The companies did not give a reason why they would be ceasing policies in California. Tokio Marine and Trans Pacific join State Farm and Allstate in discontinuing coverage for California residents.
What is the number 1 car insurance in California? ›
California Car Insurance Companies
Based on our research, Geico offers the best car insurance in California. Progressive, USAA, State Farm and Allstate are also reliable options for most drivers. *Our research team considers nationwide factors when rating providers.
Why is auto insurance in California so expensive? ›
Car insurance in California is expensive because the state has multiple densely populated, high-crime urban areas. In California, you can expect to pay approximately $4,556 per year for full coverage car insurance or $1,291 per year for minimum coverage.
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.
Can you negotiate with Allstate? ›
If Allstate Insurances's initial offer is lower than you believe your vehicle is worth, you can prepare to negotiate. It's important to present facts that support your claim. Evidence can include things like your vehicle's original window sticker, receipts from recent repairs or vehicle upgrades.
Is Allstate more expensive than Geico? ›
Geico and Allstate are both reasonably priced insurers for most drivers, but there are some clear differences when it comes to the average cost of their policies. As you can see in this chart, Geico is the cheaper of the two for the average driver.
Who is cheaper than Allstate? ›
Geico and USAA are among the insurance companies that are cheaper than Allstate.
Is State Farm pulling out of California? ›
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.
Why is Allstate losing customers? ›
Allstate, one of the nation's largest insurance companies, has joined State Farm in deciding to halt sales of property and casualty coverage to new customers in California, saying it's too pricey to underwrite policies in the state which has seen thousands of natural disasters in recent years.
Are insurance rates going up in 2024? ›
The firm's Home Insurance Projection Report foresees a 6% rise in annual premiums in 2024. The increase will put the national average at $2,522 at the end of the year. With climate experts expecting a devastating hurricane season, home insurance costs are forecasted to surge even higher in 2025.
Why does my car insurance go up every year instead of down? ›
Claims in your area
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. That risk can lead to an auto insurance price increase, even if you have a perfect driving record.
Is there a new law in California for car insurance? ›
For policies issued or renewed after January 1, 2025 the minimum limits for private passenger automobile insurance will increase to $30,000 per person, $60,000 per accident, and $15,000 for property damage. As noted, this law will not apply to policies issued or renewed in 2024.
Why did my Covered California insurance go up? ›
The rate change can be attributed to many factors, including a continued rise in health care utilization following the pandemic, increases in pharmacy costs, and inflationary pressures in the health care industry, such as the rising cost of care, labor shortages and salary and wage increases.
