What is going on with car insurance in california?

California drivers regularly pay the highest gas prices in the United States. Now they have another expense to worry about. Auto insurance is getting more expensive and harder to get in the Golden State. American Agents Alliance said the situation put the state at risk of auto insurance companies choosing not to do business in California.

Last May, the Sacramento-based trade group American Agents Alliance, which represents independent agents, called on the California Department of Insurance (CDI) to expedite the review process. State Farm, AllState and Farmer's are asking the California Department of Insurance for a nearly 7% increase in premiums.

Frazier says these problems are to be expected to become less common as rate increases are approved, but the downside is that consumers will have to pay more money for car insurance.

In addition, since the insurance commissioner froze rates during the pandemic, companies said the state has been slow to bring rates back to adequate levels to keep up with rising costs, according to advocates for insurance agents and brokers. They argue that the recently approved rate increases are not justified, in part because insurance companies overcharged customers during the pandemic, when driving activity was low.

For insurers across the country, offering auto policies has recently become much more expensive because the cost of car repairs has skyrocketed and the number of collisions has increased. Part of its business, which operates primarily in California, goes to the Automobile Club of Southern California, an AAA insurance provider. In California, some insurers haven't seen a rate increase approved by the insurance commissioner in more than 3 years. Car accidents are on the rise and some insurance companies say they're paying more than they're earning.

On top of that, D'Arelli says auto insurance companies in California only allow independent agents to issue a few policies per month, which he describes as another tactic to avoid business. California Insurance Commissioner Ricardo Lara approved increases in auto insurance rates for the state's six major companies over the past few months. Insurance companies have a profit motive to constantly increase rates, limit the amount of claims they pay and ask the insurance commissioner for higher rates, Rosenfield said. He reported that he spent four hours on the phone with several insurers, including Liberty Mutual and Mercury Insurance, and was unable to get a full coverage offer.

Bob Passmore, of the American Property and Casualty Insurance Association, an insurance industry trade group, blamed inflation for increases in premiums. The California Department of Insurance (CDI) wants consumers to know that they can submit a request for assistance to the department if they have difficulty finding insurance, said Jazmin Ortega, assistant press secretary, in an email.