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.
But there's a catch: the adjustments aren't uniform across the state. Instead, they diverge significantly between Northern and Southern California.
- 1
Northern California can expect a 28% average increase effective April 1, 2024.
- 2
Southern California can expect a 6.9% average increase effective April 15, 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 Took The Hit:
A 6.9% increase seems like a dream for AAA customers in Northern California. The 28% rate increase that just took effect is surely going to cause upset. 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.
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:
$1920
This estimator tool is only an estimate. This calculates the average increase customers can expect. (The input value is multiplied by 1.28)
Southern CA:
New Premium:
$1603
This estimator tool is only an estimate. This calculates the average increase customers can expect. (The input value is multiplied by 1.069)
Our Thoughts:
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.