Many California drivers can anticipate significant rate hikes for their auto insurance within the next six months.
“Oh, very surprised. I don't think I have received a notice from my insurance company," stated San Luis Obispo Resident Lawrence Pedrosa.
In a statement to KSBY State Fram Insurance said the following:
“We are continuously monitoring and adjusting to trends to make sure we're matching price to risk. as more people are on the roads, we're seeing an increase in claims. auto claim costs are being compounded by record inflation and supply chain disruptions. All of this has increased the cost of labor and materials, which translates to higher auto repair costs.”
A California law requires insurance companies to get approval for rate hikes from the state. Any requested hikes higher than 6.9% require a public hearing.
According to Consumer Watchdog, 20% of the market has already been approved for a price increase and many companies are following.
The group says this comes as Californians should get money back following the pandemic.
“Consumer Watchdog looked at the top 15 companies in California that cover a lot of California's market and we estimated that at least five and a half billion dollars were overcharged to Californians in 2020 and that insurance companies had only returned a little over two billion of that. So while we're seeing these auto insurance rate hikes start to take effect, we're challenging the Department of Insurance to make sure Californians get their covered refunds first," said Consumer Watchdog executive director, Carmen Balber.
Drivers are recommended to shop around with insurance companies to see which one best suits consumers' needs, especially when their current policy may be up for renewal.
KSBY reached out both via email and phone to the California Department of Insurance for comment about the approval of these price hikes but has not heard back yet.