Georgia Insurance Commissioner Ralph Hudgens on Monday issued a “consumer alert” after Allstate filed for a 25 percent auto insurance rate hike that will take effect May 22.
Hudgens said the 25 percent increase is the average rate change, but “many policyholders should be prepared to see a rate change as high as 58.3 percent.”
At the end of the 2015, Allstate had 11 percent of the auto insurance market in Georgia.
“I am deeply concerned about this filing and the impact it could have on consumers,” said Hudgens.“Georgia law prohibits me from stopping or delaying this increase unless an actuarial examination proves the rate to be legally excessive.”
Hudgens directed his staff to initiate a “professional level examination” of the Allstate filing to determine if the rate increase can be defended. If Allstate can’t defend the increase, Hudgens said he intends to act.
“Georgia adopted a ‘file and use’ system in 2008 to promote competition and lower rates among insurance companies,” Hudgens said. “This rate filing appears to promote neither.”
Before “file and use,” commissioners had to approve increases. Under the 2008 change that Hudgens supported, the commissioner can review the rate changes after they’re made just to make sure they aren’t either excessive or inadequate to keep the company in business, and to make sure they aren’t discriminatory.
The commissioner at the time, John Oxendine, warned that it would lead to a spike in auto insurance rates.
Hudgens has been criticized in the past for allowing rate hikes to get through unchallenged.
The Atlanta Journal-Constitution reported last year that auto insurers were getting their largest rate increases in a decade, with some filing more than two rate hikes in a year. The result: Georgia led the nation in 2014 with the highest overall increase in personal auto insurance rates. The state ranked second overall in 2013.
Hudgens said at the time that he doesn’t even look at any proposed rate hikes unless they are above 10 percent.