Georgia Investigating Allstate Rate Increase

A statewide auto insurance rate increase of 25 percent filed in Georgia by Allstate Property & Casualty Insurance Co. has triggered an investigation by the state’s insurance regulator.

Georgia Insurance Commissioner Ralph Hudgens issued a consumer alert through the Georgia Department of Insurance on April 11 that said the insurer’s overall statewide automobile rate increase of 25 percent will be implemented on May 22, 2016.

Hudgens said in the statement to policyholders that the 25 percent figure is only an average rate change for the entire state, and that many policyholders should be prepared to see a rate change as high as 58.3 percent.

“I am deeply concerned about this filing and the impact it could have on consumers,” Commissioner Hudgens said. “Georgia law prohibits me from stopping or delaying this increase unless an actuarial examination proves the rate to be legally excessive.”

GADOI department staff was directed by Hudgens to initiate a professional level examination of the Allstate filing to determine if the rate increase is defendable under state law.

If the results of the examination show that the filing cannot adequately support the increase, Hudgens said he intends to take every measure allowed to him by law to protect policyholders, according to GADOI.

“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.”

In an e-mail statement to Insurance Journal, Allstate spokesperson Daniel Groce said the rate increase is justified.

“We adjust rates very carefully to charge properly for the risk we assume and ensure our ability to protect customers from life’s uncertainties,” Groce said.

Groce said that as is industry standard, changes in market conditions require the company to set rates that are adequate for the coverage provided.

“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,” Groce said. “We encourage all our customers to regularly consult with their Allstate agent about the most appropriate coverage and available discounts for their particular circumstances.”

Groce added that this particular rate filing applies to one of Allstate’s three underwriting companies in Georgia and represents less than half of its insurance business in the state.

Nevertheless, Groce said Allstate will cooperate with the state’s investigation.

“We work closely with state departments of insurance whenever we adjust our rates and look forward to a continued dialogue with the Georgia Department of Insurance,” Groce said.

The Allstate Group of companies is the second largest automobile policy provider in the state of Georgia. As of Dec. 31, 2015, they held a market share of 11 percent of all Georgia automobile policies.

GADOI said that policyholders should discuss the reasons for the increase and options available to them with Allstate.