If you are a California driver use state farm for you car insurance, your auto insurance is about to become a lot more expensive. ARE NOT, The State Farm is not hiking reat for owners of Hyundai and Kia modelsinstead of scaling up from their pandemic lows, LA time report.
Insurance rates drop during dense times of COVID-19 pandemic, thanks city and state shelter in place stipulates that make most of the streets empty. But, as you know, Insurance companies are in business to make money. And when everyone else is getting back on the road, that’s what it means other insurance companies, State Farm will follow suit and increase its rate again.
Home and auto insurer is waiting for California Insurance Commissioner Ricardo Lara to approve $264 million increase. Lara has so far collectively approved $1 billion in premiums for the state’s top six insurers. If State Farm agrees, 3.7 million drivers will see an average annual increase of 6.9%, or $71 per policy, according to the report. Consumer watchdog.
To get that gain, according to state law, state farm will have to explain why the increase is necessary. It can be argued that the spike was to make up for large guarantee deficit State Farm has experience in 2022 – a huge number $13.4 billion USD in losses on 45.7 billion USD in insurance premiums. So sure, the insurance company will raise interest rates to make up for that loss.
However, The consumer watchdog argued that the increase was driven by mere greed. Carmen Balber, CEO of Consumer Watchdog says the increase is initialed by the insurance commissioner.
“The Department has just implemented, and hastened to implement, increasing in each of these cases without adequate justification for any of them,” Balber said.
A spokesperson for State Farm told LA Times that The rate of increase is simply the result of more drivers back road.
“As more people get on the road, we see an increase in claims. Auto claims costs are rising due to record inflation and supply chain disruptions. All of this has increased the cost of labor and materials, resulting in higher auto repair costs.”
Add cherries to the top of this bad news for the wheel, The consumer watchdog said the rate hike was happening even though State Farm and other insurers “failed to pay their customers unexpected fees during the lockdown due to the pandemic.” epidemic, as people dramatically reduce driving and accidents and insurance claims drop.”
Insurance Commissioner’s Spokesperson complain guarantee agency that consumers are not paying more than they should for their coverage.
