Farmers
Under Farmers' approved $167.8 million overall 6.9% rate hike, 1.7 million policyholders will face average increases of $98 per policyholder. Additionally, this approval allows Farmers' to continue its discriminatory three-tiered rating system charging low-income workers up to $130 higher base rates for a six-month policy than professionals with advanced degrees. Consumer Watchdog wrote to the commissioner in December calling on him to reject the proposed rate changes.
Allstate
Under Allstate's approved $165 million overall 6.9% rate hike, more than 900,000 policyholders will face an average $167 annual premium increase. Consumer Watchdog wrote to the commissioner in September urging him to reject Allstate's rate proposal and job-based rating system.
Allstate filed for another 6.9% rate hike in January that is still pending approval. That filing removed its job-based discounts for the first time since they were approved by the department 10 years ago.
In March, Consumer Watchdog filed a petition for a hearing on Infinity's auto rate filings. Under its rate application for the company's "RSVP" auto program, Infinity is requesting a $168.7 million overall 34% rate hike impacting 467,104 insured vehicles with an average rate increase of $360 per vehicle. For its "Special" auto program, the company is seeking a $130 million overall 26.1% rate hike impacting 522,237 insured vehicles for an average rate increase of $250 per vehicle. Among other issues, Consumer Watchdog's petition alleges that the company is over-stating its expected losses, resulting in an inflated rate request.
Background
Voter-approved Proposition 103 requires insurers open their books and justify their rates in a public process in which consumer representatives have the right to access information filed with the commissioner and actively participate. If an insurance company seeks a rate increase that exceeds 7%, and the application is challenged by the public, the department must hold a hearing. Companies frequently file serial rate increase requests that fall just below the 7% threshold in order to avoid a public hearing.
In a 2019 study of the nation's insurance laws, the Washington, D.C.,-based Consumer Federation of America called Proposition 103 "the best in the nation" and calculated it had saved Californians $153 billion on their auto insurance premiums alone, while allowing insurance companies to earn fair profits.
Prop 103 also requires auto insurance premiums be based primarily on three mandatory factors---driving safety record, annual mileage and years driving experience---and prohibits excessive and unfairly discriminatory rates. The commissioner can adopt other optional rating factors by regulation, but occupation has never been adopted as a rating factor.
Consumer Watchdog and 10 community and civil rights organizations challenged auto insurers' illegal and discriminatory use of job and education to set rates in February 2019. In September 2019, a Department of Insurance investigation confirmed those concerns, finding "wide socioeconomic disparities" created by insurance companies surcharging California drivers based on nothing more than their occupation or educational status. In December 2019, the department proposed rules to address this unfair discrimination. However, more than three years later, those rules have not yet been adopted by the commissioner.
Source: Consumer Watchdog
Abby Andrews