Georgia’s Insurance Commissioner has a message that may have some Allstate customers wondering if they’re in such “good hands” after all.
Commissioner Ralph Hudgens tells us he was pretty shocked when the company filed a new rate hike for auto insurance. “It’s an average of 25 percent, but that’s the average,” said Hudgens. “In some cases for some customers it might be as high as 50 percent or a little more.”
Hudgens says he’s concerned about customers who may not be able to pay, saying they should receive notices in mid-May. “They’ll go out about that time and that’s when people are really going to be shocked,” he told us.
Hudgens says he has no power to overrule Allstate or force them to negotiate a lower, alternative rate. He says before 2008, an insurance commissioner in Georgia did have that power, but the law was changed. “Georgia is what’s called a ‘file and use’ state since 2008. It was a prior approval state which meant that the commissioner had to approve any rate increase. But with file and use, they tell us what they’re going to do and they do it,” he says.
Hudgens says his only recourse is to call for an “actuarial exam” which means an expert examines data and uses and looks at all the parameters of why Allstate is calling for the increase. “And then we determine whether it’s justified or not. And if we’re told it is justified then we can’t do anything, but if it’s not, then I can order them to roll back the increase,” said Commissioner Hudgens.
Allstate sent us this statement regarding its request for the auto rate hike:
“By offering a broad range of innovative protection options, Allstate provides strong value to our customers. We adjust rates very carefully to charge properly for the risk we assume and ensure our ability to help 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.
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. As is industry standard, changes in market conditions require that we set rates that are adequate for the coverage we provide. 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.
We encourage all our customers to regularly consult with their Allstate agent about the most appropriate coverage and available discounts for their particular circumstances.”
Again, Commissioner Hudgens says what he can do right now is provide consumers with the information regarding the rate hike and when they may learn more from Allstate. He also encourages customers to talk with their agent and if not satisfied, to shop around. “See if you can reduce your coverage or see if you can maybe get a larger deductible,” he told us. “Or shop around, you know you can get in touch with State Farm, you can get in touch with Nationwide – they’re large carriers – or you can get in touch with an independent agent. So that’s my recommendation to the citizens of Georgia.”