Californians who have their auto insurance with Allstate and State Farm will face substantial increases in their rates beginning in February. Allstate's rates are set to rise by 30%, while those of State Farm will go up by 21%.

In a press release issued in December 2023, Allstate announced that the California Department of Insurance had approved a 30% increase in auto insurance rates, which will come into effect in February 2024. Jess Merten, Allstate's Chief Financial Officer (CFO), stated that the rate hikes for vehicles, as well as homes, were part of the company's efforts to "offer protection to customers." He added, "The rates are expected to raise annualized written premiums by approximately $1 billion."

The San Francisco Standard reported that the California Department of Insurance also greenlighted a 21% rate hike for State Farm's auto insurance, effective from February 26. Karl Susman, President of the Los Angeles-based Susman Insurance Agency, told The Standard that rising costs for vehicle parts and repairs were at least partially responsible for the increased rates. "There really is no such thing as a minor auto claim anymore," said Susman. "The smallest claim is still often super expensive."

According to the latest Consumer Price Index (CPI) report from the Bureau of Labor Statistics released on January 11, the cost of motor vehicle insurance has risen more than the overall inflation rate. The report found that while overall inflation for the year ending December 2023 was at 3.4%, auto insurance costs surged by 20.3% during the same period.

Delaney Simchuk from WalletHub reported that State Farm is currently the largest car insurance company in California. Behind State Farm are Geico and Progressive, with Allstate ranking fourth.

Allstate was established in 1931 and has its headquarters in Illinois, according to Yahoo Finance. The company, led by President, CEO, and Board Chairman Thomas Wilson, offers insurance policies for vehicles, property, and other products in the United States and Canada.

Worth Insurance reports that State Farm is a private company that provides home, vehicle, and life insurance policies. The company is helmed by President, CEO, and Chairman Michael Tipsord and has approximately 87 million account holders.