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Ga. Insurance Commissioner Warns Of Allstate Rate Hike

April 12th, 2016

A car drives past an Allstate Insurance Co. office Wednesday, April 27, 2011, in Lyndhurst, Ohio. Allstate Insurance Co. reports quarterly financial earnings Wednesday, after the market close. (AP Photo/Tony Dejak)

Tony Dejak / Associated Press

Georgia Insurance Commissioner Ralph Hudgens has issued a rare consumer alert over a rate hike proposed by auto insurance company Allstate.

Allstate has filed to raise automobile rates statewide by 25 percent, with the rate hike going into effect May 22.

Hudgens said that 25 percent bump is only the average rate change, and that some policyholders could see increases as high as 58.3 percent.

“I am deeply concerned about this filing and the impact it could have on consumers,” Hudgens said in a prepared statement posted to the department’s website Monday evening. “Georgia law prohibits me from stopping or delaying this increase unless an actuarial examination proves the rate to be legally excessive.”

Hudgens Monday told his staff to examine the Allstate filing to see if it’s defensible under state law. He said if the Allstate filing is deemed “excessive,” he’ll take “every measure allowed” to act.

“Georgia adopted a ‘file and use’ system in 2008 to promote competition and lower rates among insurance companies,” Hudgens said. “This rate filing appears to promote neither.”

Prior to the 2008 “file and use” system, the state insurance commissioner had to approve each rate increase insurers proposed. Now, insurers file their rate increases with the state and give the day they’ll go into effect, but the commissioner can review those rates to ensure they’re justified and not excessive.

This is Hudgens’ first consumer warning since becoming commissioner. The commissioner’s office says Allstate is the state’s second largest automobile policy provider, with about 11 percent of the market.

In a prepared statement, Allstate spokesperson Daniel Groce said, “We adjust rates very carefully to charge properly for the risk we assume and ensure our ability to protect customers from life’s uncertainties. This particular rate filing applies to one of Allstate’s three underwriting companies in GA and represents less than half our auto insurance business in the state.”

“As is industry standard, changes in market conditions require that we set rates that are adequate for the coverage we provide,” Groce said. “Increases in the number of miles driven, the amount of traffic fatalities, and the costs associated with repairing vehicles have caused the insurance industry to experience a significant increase in both the number of claims received as well as the cost associated with settling these claims.”