Are auto insurers pulling back from California?
Are auto insurers pulling back from California? | Insurance Business America
Motor & Fleet
Are auto insurers pulling back from California?
Rate approval delays complicate rising costs faced by companies
Motor & Fleet
By
Mika Pangilinan
California is in the midst of more insurance woes as reports indicate that auto insurers are restricting new policies.
Companies have had to raise auto insurance rates across the US to offset the impact of inflation and increased claims. In California, these challenges are made even more complicated due to insurers’ inability to quickly adjust rates.
The state requires regulators to approve rate increases and the review process has slowed since the California Department of Insurance implemented a rate freeze during the pandemic.
The delays have caused insurers to “terminate agency appointments and restrict the submission of business,” according to American Agents Alliance, which represents independent insurance agents and brokers.
While auto insurers have yet to come out and say that they’re pulling out of the California market, industry insiders like Jerry Becerra told KTVU that only a handful of standard insurance companies are actively writing new policies.
Becerra, who is president of Barbary Insurance Brokerage in Oakland, said insurers are becoming increasingly selective when it comes to renewing policies, adding that this trend could push consumers toward non-standard markets that have higher rates and may not provide adequate coverage.
“The first thing is the insurance commissioner needs to work diligently to alleviate the needs,” he told KTVU.
Among other proposed solutions, the association highlighted the need to streamline the rate filing process to meet statutory timeframes.
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