Insurance is more costly and harder to get in California. Now, Consumer Watchdog reports that it has successfully settled three challenges against proposed double-digit rate hikes by 21st Century Insurance Company, United Services Automobile Association (USAA), and Liberty Insurance Corporation.
According to the organization, the settlements will result in savings of more than $53 million for California policyholders. The new rates, effective between November 18, 2024, and February 12, 2025, will affect over 671,000 policyholders.
The advocacy group argued that the companies overstated their projected losses, which it says led to excessive rate proposals.
"Given the current state of the California insurance market, with insurer-created shortages and massive rate increases, it's important that applications are closely scrutinized," said Benjamin Powell, a staff attorney at Consumer Watchdog.
The three cases
Consumer Watchdog said 21st Century initially sought an 18.4% increase for auto insurance policies following a previous $29 million increase in January 2024. The group challenged that as excessive, citing inflated projections for bodily injury and uninsured motorist claims, as well as improper charges for institutional advertising. The group successfully advocated for a reduced increase of 15.9%, saving policyholders over $11.5 million.
USAA asked for a 20.2% increase for homeowners, condo, and renters policies, which Consumer Watchdog said would have cost policyholders $53 million. The group challenged the hike, pointing out what it said were overinflated loss projections and improper advertising expenses. The settlement resulted in a 16.8% increase, saving more than $10 million.
Liberty Insurance sought a 29.1% increase for homeowners policies, costing over $67 million. Consumer Watchdog argued the rate was excessive and challenged Liberty's advertising expense claims. The final agreement allowed for a 16.5% increase, saving policyholders over $31 million.
The advocacy group was able to challenge the proposed insurance rates under Proposition 103, which mandates transparency and consumer representation in rate-setting processes.