Georgia insurance commissioner raises alarm on Allstate's "substantial" rate increases

Georgia insurance commissioner raises alarm on Allstate's "substantial" rate increases | Insurance Business America

Georgia insurance commissioner raises alarm on Allstate's "substantial" rate increases

John F. King, Georgia’s Insurance and Safety Fire Commissioner, has issued a notice to the state’s public, alerting them of the overall statewide auto insurance rate increases implemented by Allstate Property & Casualty Company.

Allstate has plans to raise auto rates in Georgia by a sharp 25% for new customers by September 12. Meanwhile, current customers will see the rate change upon their renewal starting October 16.

The rate increase has been heavily criticized by King.

“I am angry and disappointed that Allstate has chosen to exploit a loophole in state law to implement such a substantial increase in costs on hardworking Georgians when families are already struggling with historic inflation everywhere from the gas pump to the grocery store,” said King.

The Office of the Commissioner of Insurance and Safety Fire explained that under Georgia’s dual rate filing system, the commissioner only has the authority to approve or disapprove minimum limits policy filings. But other types of filings – such as Allstate’s – can go into effect immediately in a practice the office has called “file and use.”

“This latest increase means Allstate has now bypassed our office to raise overall rates in Georgia by 40% in this calendar year alone,” King said.

The commissioner said in a statement that he has begun conversations with state legislators on changes to the law which would give the Office of Commissioner of Insurance and Safety Fire “additional authorities to protect consumers from these types of inexcusable actions.”

Read more: State Farm and Allstate hit by insurance litigation

A report published last month by Lex Machina found that Allstate Insurance was the third most active defendant in insurance claim litigation cases from 2017 to 2021, with a total of 1,236 cases to its name. The insurer is beaten only by State Farm Fire & Casualty, with 2,332 cases, and State Farm Mutual Auto Insurance, with just under 2,500 lawsuits during the five-year period.

Update
In response to the insurance commissioner’s comments, Allstate issued the following statement:

“Allstate lowered auto rates in Georgia last year when many other insurers were raising rates. Though inflation, more frequent and severe accidents, costlier repairs, and other factors have been causing auto rates to go up, customers will continue to get competitive prices with Allstate and can save money for driving safely using Drivewise.”