New York, New Jersey, and California regulators have all given the green light to double-digit hikes.
Allstate recently announced that it had received the go-ahead for double-digit auto insurance rate increases in New York, New Jersey and California.
The approvals follow President and CEO Tom Wilson’s comments regarding dropping customers.
Wilson had previously stated that if the auto insurance rate increases were not approved, the company would be dropping customers in those states. The approvals did come through, and they were for very large increases in all three states.
New York drivers will see the lowest average hikes of the three states, at 14.66 percent. That said, New Jersey drivers will see a notably higher 20 percent average increase. Still, that is nowhere near the massive 30 percent average increase that will be hitting the wallets of drivers in California insured by Allstate.
The new auto insurance rates will become effective as of December with effective dates through February.
The company announced its rate hikes in a recent news release that followed a statement made by Wilson at a Goldman Sachs Financial Services Conference, in which he said that Allstate intended to leave any of those three states that did not approve its rate increase requests.
“If we don’t get price increases this year, or approved this year, in those states, we’re going to move from just not taking on new businesses to having to say goodbye to existing customers,” said Wilson at the time. “We don’t want to do that. I think the regulators would prefer we not do that. We are not threatening anybody. We are just saying we can’t afford to lose that much money in those three states.”
According to Wilson, the auto insurance company required the 30 percent increase in California to remain profitable. He said that New Jersey needed the same amount and New York needed an 18 percent increase.
“When you look forward next year, either we’ll be successful and get the kind of rate increase we need to get back into the margins that we want, or we’ll get smaller in those states,” said Wilson. “Either way, it should improve auto insurance profitability.”
