Allstate recently received a 30 percent hike in auto insurance rates from the California Department of Insurance, said Mario Rizzo, president of property and liability at the company, in a Feb. 8 company earnings conference call.
The recent rate increase will help the company recover from a rise in accidents in recent years, an Allstate spokesperson told The Epoch Times.
“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,” the spokesperson said in an email.
Allstate’s new rates could mean increases ranging from 10 percent to up to 55 percent for California drivers, a spokesperson for the state’s insurance department told the San Francisco Chronicle.
A spokesperson for the company said, thanks to the rate increase it can now “improve insurance availability.”
Janet Ruiz, a spokesperson for the Insurance Information Institute—a New York-based organization that provides insurance information to the consumer—told The Epoch Times auto insurance premiums are largely on the rise due to inflation and the increasing cost of car parts. Other factors include more accidents, especially with recent storms in California.
She said new technology also plays a role.
“When you look at cars now, a bumper used to be relatively inexpensive to replace,” she said. “Now they have sensors and cameras … there’s so much more technology in the cars. They’re much more expensive to repair.”
She said rate increases hitting California are normal and are carefully scrutinized by the state.
“The Department of Insurance goes through those rate increase filings or requests with a fine tooth comb and will not allow [insurers] to overcharge,” she said.
Last year, the state’s insurance department approved 111 rate increases according to CalMatters, a nonprofit news outlet that covers California policy.
Allstate additionally reopened auto insurance sales online or by phone Feb. 7, after a temporary pause last year when the insurer only allowed in-person sales through an agent.
The rate increases come as the company attempts to recoup the cost of insuring drivers, according to Mr. Rizzo, who said Allstate will “continue to get smaller” in New Jersey where its increase was less than expected, unlike California and New York, which were more on par with the company’s requests.
