Auto insurance is a dynamic market, with rates regularly being revised based on a myriad of factors. In 2024, California's residents have seen notable shifts in their auto insurance premiums.
- 1
Northern California can expect a 17% average increase in 2024.
- 2
Southern California can expect a 14% average increase in 2024.
The Why Behind the Hikes:
We can only speculate the reasons for the increases. AAA made a staggering amount of money in 2022 after paying claims, but this does not take into account their operational costs.
Northern California Delayed The Hit:
Did you notice your 16.7% increase last year? This year's 9.5% rate increase on April 4, and 6.9% increase October 1, 2024 may only be just the beginning. Previously, AAA tried to increase the rate in Northern California 28%, and their statistics show they should increase about 30%. They were not successful. For an unknown reason, after a few revisions with the State of California, they are only increasing prices by about 17% in 2024. View the 10 year price history here.
Southern California was nearly 30% more profitable for AAA, resulting in $691 million left over after claims in 2022. (This statistic is also before operational costs.)
If AAA's Northern California company had the same profitability as their Southern counterpart, they would have been the most profitable company last year at $935 million compared to their current $628 million after claims. Because Northern California's AAA company isn't making as much money and did not get approved for as high a rate increase as they wanted, you can expect rate increases next year for Northern California AAA customers.
Southern California:
Southern California AAA customers will see a 6.9% rate increase on June 1, 2024, followed by another 6.9% increase on November 1, 2024. A 14.2% increase. Last year had a 14.2% increase as well, which brings the 2 year increase to 30.6% You can view the 10 year price history here.
Hopefully that will be all Southern California will see for a few years.
Take Action:
While it might be tempting to view insurance rate hikes through a singular lens, the reality is multifaceted. All you can do is get quotes with their competitors to compare prices.
You can estimate your increase using our calculators below:
Northern CA:
New Premium:
$1755
This calculator tool is only an estimate. The input value is multiplied by 1.17
Southern CA:
New Premium:
$1712
This calculator tool is only an estimate. The input value is multiplied by 1.142
Our Thoughts:
Northern California may continue to increase next year, while Southern California may not. AAA's rate increase in California is huge. I think there will be a lot of opportunity for customers to review their policy and switch companies. I wonder what customers find when they shop around. Is this rate increase justified? Let me know.
Brian Abbott
October 5, 2023
Our sources
- AAA Insurance Prior Approval Rate Application For Property & Liability Lines General Information document filed with the Department of Insurance on September, 02, 2023
- CDI File numbers: 23-1910 22-1466
- Related NAIC Company Codes: 15598, 15539
- Related NAIC Group Codes: 1318 1278
Article updated Jan 2024. Effective dates of increases have changed per AAA's new rate filing submitted on Jan 10, 2024.
Article updated June 2024. It appears AAA attempted to increase prices 28% and ended up only increasing prices 9.5%. AAA's new rate filing submitted on March 5, 2024.
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