California drivers using State Farm for their auto insurance face a $263.7 million premium increase, the largest total amount approved

since October

by the California Department of Insurance.

State Farm insures more California drivers than any other company operating in the state. Those 3.7 million California drivers will see an average annual raise of $71 per policy, a 6.9% increase, said Consumer Watchdog, a Santa Monica-based advocacy group.

The latest increase granted by California insurance commissioner Ricardo Lara follows approvals for rate increases for several other major auto insurers, including Geico and Mercury Insurance, after a long lull in the COVID era.

In total, Lara has approved more than $1 billion in premium increases with the state’s six largest companies, which insure approximately 48% of California-registered vehicles.

which

Consumer watchdog called

It

“Unjustified and exaggerated.” low income

income

drivers will be hit the hardest, the group said.

“The department just rolled out and rushed out, raising in each of these cases with no full justification from any of them,” said Carmen Balber, executive director of Consumer Watchdog, adding that it is ignoring the requirements to justify the increases that in Proposition 103, the state’s auto, homeowners, and casualty insurance law.

Californians, brace yourself for another bill increase: your car insurance

baller

said it was painting

“a disturbing picture” of the department “approving what is now over $1 billion

dollars

in rate increases without adequate oversight.”

Lara didn’t specifically comment on the State Farm case, but he said through a spokesperson that there was nothing outrageous about the approved rate increase.

S

.

“Commissioner Lara’s actions since July 2020 have so far returned more than $2.55 billion to auto consumers,” said Gabriel Sanchez, press secretary for the Insurance Department, “and he continues to review data from insurance companies to determine whether they are paying drivers. charged a lot during the Pandemic.”

“Since 2019, Commissioner Lara has been slowing down rate increases in California and protecting consumers despite skyrocketing rates across the country, with increases remaining at their lowest level in a decade,” Sanchez said.

State Farm reported record underwriting losses for 2022 in February,

say:noting:

“While State Farm posted adverse business results in the auto industry, State Farm Mutual Automobile Insurance Company remains financially strong.” State Farm, which writes auto insurance in all 50 states, said the auto segment accounted for $13.4 billion in insurance losses on $45.7 billion in premium earned

S

.

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State Farm spokesman Sevag Sarkissian said in an email that the insurer “constantly monitors and adjusts to trends to make sure we align price with risk.”

“As more people are on the road, we are seeing an increase in claims. Auto claims costs are exacerbated by record inflation and supply chain disruptions. All of this has increased labor and material costs, which translates into higher auto repair costs,” he said .

According to Consumer Watchdog’s running tally of rate increases approved to date, drivers with the Auto Club’s Interinsurance Exchange will pay $75 more per insured vehicle. Those insured by Mercury pay $80 more per insured vehicle. Geico drivers will see a $125 annual premium increase. Farm drivers will pay $98 more per year, and those insured by Allstate will see a $167 annual increase.

The state’s insurance department does not issue a public statement when it has approved rate increases. Most motorists hear about the new premiums when their bills arrive in the mail.

The new round of increases will be an additional burden for California consumers already facing high interest rates and other inflationary pressures that have made credit card spending more expensive, especially as more people rely on them for everyday purchases. Bankrate recently said that the average credit card interest rate has risen to 20.05%, the highest since Bankrate started tracking interest rates in the mid-1980s.

Roy Persinko, a Southern California contractor for 22 years, probably knows more than most about the implications of all those higher costs.

“Everything in my business has gone up,” Persinko said. “But the cost

S

auto repair rates are up Thefts are up Am I excited about what I’m paying for auto insurance? No, but it’s understandable.”

California has waited longer than any other state to raise auto premiums after the pandemic eased, said Denni Ritter, vice president at American Property Casualty Insurance Assn. On their return to the road, California drivers have driven faster and, increasingly, under the influence, Ritter said, leading to injuries that are more serious from accidents, and they are wrecking cars that have higher repair costs than in the past.

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“Those are what really make costs skyrocket in the auto insurance business,” Ritter said.

Consumer Watchdog said insurers’ claims that they were hurt because they were unable to raise premiums fast enough are exaggerated and misleading. In addition, rising premium costs will not be shared equally among motorists and will unfairly burden low-income workers, who will pay up to 25% more than college-educated professionals at certain insurers, including Geico, the group said.

Harvey Rosenfield, author of Proposition 103 and founder of Consumer Watchdog, said the rate increases will be approved when insurers “did not pay their customers for unanticipated overcharges during the pandemic lockdown, when people drastically reduced their driving and accidents and insurance claims fell.

.”

Consumer Watchdog has estimated that motorists owe billions.

“

Sanchez replied that Lara is

instead of

“using all available tools to ensure that consumers do not pay more than they should.”