We can only speculate the reasons for the increases. Insurance companies are struggling to achieve profitability. Their models project higher losses, so they are reacting.



In 2022 insurance companies in California paid out $79.29 for every $100.00 they recieved from premiums for liability, and $83.30 was paid out for physical damage coverage. (Like Comprehensive and Collision coverage.) While each insurance company has a different profitability target they want to achieve, I believe many aim to be only paying out $70.00 for every $100.00 brought in. This leaves enough room for the insurance companies to pay operational expences, and have some left over for profit.

In 2022 Allstate paid out $90.72 for every $100 brought in for auto liability.

In 2022 Allstate paid out $84.63 for every $100 brought in for auto liability.

So almost all your money paid to the insurance company last year went to claims. With this smaller-than-normal amount the insurance companies have left over, they must pay rent, payroll, and other business expences.

Would you want to be the insurance company in this case? I wouldn't. Allstate performed significantly worse than their competition. They performed nearly 10% worse than the average company for liability claims.

So while you may feel like you personally don't deserve this increase - the number's show that Allstate must increase their rates.



Allstate isn't the only company raising rates. All you can do is get quotes with their competitors to compare prices.

Here is a calculator to estimate your premiums from this increase:


Allstate's rate increase, although understandable when reviewing the numbers, is going to be unbearable for many customers. The insurance market is going to be tough the next 2-3 years. Auto and homeowners insurance are facing difficulties. Quote around! Weigh your options.