LOS ANGELES (KABC) — Auto insurance premiums are on the rise nationwide, and California drivers should brace themselves for a substantial increase by the year’s end, according to data from an online insurance broker.
A recent study by Insurify, an online provider of auto, home, and other insurance products, reveals that the average auto insurance rate across the U.S. has surged by 15% in the first half of this year. The study predicts that rates will continue to climb, reaching a 22% increase by the end of 2023.
California drivers, however, are facing an even steeper hike. According to Insurify’s findings, rates in the Golden State are expected to jump by 54%, more than double the projected national average.
“We are definitely seeing double-digit rate increases, and those are a little bit higher in California than they are in some places,” said Carmen Balber, executive director of Consumer Watchdog, a long-standing monitor of California insurance rates.
While Balber does not endorse Insurify’s specific numbers, she acknowledges that auto insurance rates in California are unjustly high.
“Sometimes, the Department of Insurance does not give rate increases the scrutiny that they need,” Balber added.
The California Department of Insurance declined to provide an on-camera interview for this report but issued a statement:
“The Department’s rate regulation experts take the lead in thoroughly analyzing each rate change request to ensure that what is being requested by insurance companies is compliant with California laws and justified.
While rate changes have been approved under the auspices of Proposition 103, if proposed rates are excessive, the Department requires insurance companies to reduce the proposed rates.”
Insurers often cite the rising costs of vehicles as a justification for rate increases. However, the Consumer Price Index indicates that the price of used cars has dropped by 10.9% over the past year, while new car prices have fallen by 4.4%.
In addition to vehicle costs, higher insurance premiums are being driven by the escalating expenses associated with car repairs and the increasing frequency of natural disasters such as hurricanes and wildfires, which cause significant damage to vehicles.
Consumer Watchdog advises drivers looking to save money on auto insurance to shop around. If you are driving less, perhaps due to working from home, ensure your insurer is aware of your reduced mileage. Additionally, consider driving an older, less expensive vehicle.
Despite the steep rates in California, drivers in other states are facing even higher premiums. Insurify notes that California ranks in the middle of the pack, with several states having higher average insurance rates.
