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
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 has car insurance gone up in California? ›
It's a consumer protection law that goes back to the 1980s. It requires insurers to justify why they're asking for rate increases before the state approves them. Insurance companies, they hate this, you know? Some have become reluctant to do business in California, which has prompted the state to raise rates after all.
Did Allstate raise rates in 2024? ›
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 Allstate Drivewise raise your rates? ›
Drivewise might be worth it if you're willing to risk your rates going up. Good drivers can save a lot with Drivewise. But because the program can increase your rates, you should only sign up if you're comfortable with that risk. Allstate Drivewise can save you up to 10% when you sign up.
Why does Allstate keep raising my rates? ›
Insurers usually weigh several factors when it comes to car insurance rates. Common among them are speeding tickets, DUIs, credit and moving violations. But beyond that, insurers also consider specific risks like the rates of accidents, vandalism and theft in your area, which result in higher claim rates.
Who is cheaper than Allstate? ›
Geico and USAA are among the insurance companies that are cheaper than Allstate.
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.
Is Allstate 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 cheapest car insurance in California? ›
Geico, USAA, Mercury Insurance, Progressive and CSAA are the five cheapest car insurance companies in California, according to our research. The average cost of full-coverage car insurance in California is $193 per month or $2,313 per year.
Is Allstate being sold? ›
Allstate Corporation has closed the sale of its life and annuity business – Allstate Life Insurance Company (ALIC) – as well as certain other subsidiaries to entities operated by investment management company Blackstone. The transaction was first announced earlier this year.
Geico, Progressive, USAA, State Farm and Allstate are the best car insurance companies in California based on cost, reputation and coverage options.
Did AAA rates go up in California? ›
More than a million California policyholders insured through AAA are seeing their home insurance rates rise — sometimes by substantial amounts. CSAA, the Northern California insurance affiliate for AAA, was approved last Friday to raise its average home insurance rate by 6.9%.
What is the average savings with Allstate Drivewise? ›
How much money do you get back with Drivewise? According to an Allstate advertisem*nt in May of 2022, safe drivers can save up to 40% by using Allstate Drivewise. However, discount amounts vary widely depending on your driving habits.
Can you turn off Allstate Drivewise? ›
Yes, you can turn Drivewise off by going into the Allstate mobile app, locating the settings menu, and changing the Drivewise tab from “Active” to “Off.” After turning the program off, an option to “Auto-Restart” will pop up, which lets you choose how long you'd like to keep Drivewise off.
Do I have to use Drivewise with Allstate? ›
Drivewise, in the Allstate mobile app connects you to a more personalized auto insurance rate, saving you money for your everyday safe driving. Basically, the more safely you drive, the less you'll pay. Drivewise is optional and can be added at no cost to any car insurance policy.
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.
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.
Is Allstate or Progressive more expensive? ›
In terms of car insurance costs, Allstate is more expensive than other top competitors like Progressive, Geico and State Farm. In the category of affordability, we rate Progressive 7.8 out of 10.0 stars and Allstate 7.4 out of 10.0 stars.
Why is Allstate losing customers? ›
Both companies are blaming climate change and inflation, saying they can't make money here. "The cost to insure new home customers in California is far higher than the price they would pay for policies," read a statement issued by Allstate.
