One of California's largest auto insurers hikes prices 30%

[Auggie]

After pausing its direct sale of auto insurance policies in California, Allstate is back, but with higher prices for customers.

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%, according to a California Department of Insurance spokesperson.

Allstate is the third largest insurer for private passenger auto physical damage and private passenger auto liability in California.

SNIP

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.”

Link (paywall): https://www.sfchronicle.com/climate/article/allstate-car-insurance-18665199.php

Highlights, from the link:

• State Farm Auto is raising rates 21% starting this month, according to the San Francisco Standard.

• In April, GEICO Auto will also increase rates 12.8%, the Standard reported.

• Overall in California, the average annual car insurance premium went up about 18% from 2023 to 2024, according to Bankrate.com.

---------------------------

"We need to adjust rates to reflect the cost of providing the protection our customers depend on."

Bullshit. Try "we need to adjust rates to maintain the quarterly dividends our shareholders depend on."

[lapfog_1]

1. They are using one group of customers

to support the loses in another group of customers.

Specifically car insurance customers to cover home insurance customers ( especially those near the forested areas of California ).

The cost of car repair has not increased 30 percent... or even 20 percent YoY.

[brewens]

3. Does full coverage insure against cars damaged or destroyed in disasters? That's probably part of it.

If that's where they get hurt, just jack the price up for only people that can afford full coverage.

I have an older truck and can't afford full coverage. If it gets destroyed, I have to buy another older vehicle. I sure as shit can't afford to subsidized someone driving a rig that costs ten times what I drive.

[lapfog_1]

5. average cost to replace a burned to the ground house far out weigh the cost to replace a vehicle.

and this is to pay for past sins, mostly by power companies and transmission lines... lines that snap in high winds combined with very dry underbrush under those transmission lines. Instant massive forest fire. entire towns destroyed.

Right now, there are many areas of California where you cannot buy insurance, at any price, for your home in rural parts of California.

No insurance, no mortgage... No bank will loan you money for an under insured or uninsured asset.

[Auggie]

6. Maybe

There's no evidence cited in the article to support that claim. Do insurance divisions operate autonomously? Or is it one big bottom line?

Allstate DID suspend the selling of new homeowner policies in the state last summer. They could just as easily raise rates on existing homeowner policies to cover losses in high-risk fire zones.

[JohnSJ]

2. I am in the Bay Area, and from my anecdotal observations, people are driving faster, taking more

chances, and generally more careless.

[quaint]

4. I believe medical care increase is one of their excuses.

This will put more vehicles into the used car market...
No bus service in my city.
How are students, seniors and other low-income people to travel?
Uber, etc. drivers are hurting but that does not make rides affordable.