New Auto Insurance Rate Changes Proposed in California From CSE, Eagle West and Safeco for 2017-2018

Five insurance companies have filed for rate changes in California. If approved, all changes will take effect in 2018. The companies include CSE, Eagle West, California Capital, Safeco, and First National. The rate filings are still pending, but we have detailed the possible changes for policyholders per company below.

CSE Safeguard insurance company proposed a 6.9% policy increase

CSE Safeguard Insurance Company has filed for a rate change for their California auto insurance customers. The increase will average 6.9%. Not all policyholders will see that increase, however. Some customers might be affected by a higher increase of 11.4%, but others might see a decrease of -0.4%.

The company has estimated that 17,231 policyholders will be affected by the proposed changes. Converting the average car insurance rate change of 6.9% into dollars shows that policyholders will see an increase of around $76 to their policies.

One of the other proposals in the filing is an increase or surcharge of 10% for new customers compared to previously. If these changes are approved, new customers would be paying 10% more than they previously would in their first year. After that, customers would see a small loyalty discount keeping their policies at CSE. The company has stated that new business is more expensive and therefore has added the increases to supplement those costs. CSE has stated that renewed business is not as expensive to underwrite and therefore will not be affected by the new business changes. Policyholders who renew for their second year would receive a 2% discount off of base rates. However, it's important to note that policyholders who have been with CSE for at least 6 months will not see this change on their first renewal. These changes, including the rate impacts, would be enacted on April 15, 2018 for both new customers and those who choose to renew their policies.

CSE also gave guidance on how each type of coverage would be impacted. In order for readers to understand the different impacts, the changes to each coverage have been put into the table below. Premiums for Medical Payments and Comprehensive were actually expected to experience rate decreases overall.

CoverageImpact (%)
Bodily Injury2.0%
Property Damage8.0%
Medical Payments-5.0%
Uninsured Motorist22.0%
Liability6.9%
Comprehensive-14.0%
Collision13.0%
Physical Damage7.0%

Eagle West and California Capital Insurance Companies proposed policy changes

Both Eagle West and its sister company, California Capital Insurance Company, have submitted a rate filing that is still under review by the state. The proposed changes would average in an increase of 6.9% for policyholders with either company. The changes would affect bodily injury, property damage, uninsured motorist bodily injury, comprehensive, collision, towing labor, and rental reimbursement policies.

Eagle West's proposed changes would affect 2,436 policyholders. The maximum increase that a policyholder may see is 12.6%. Of course, not all policyholders will see this change-some may see a smaller increase of 4.3%.

California Capital policyholders will see similar maximum increases to their policies, with a possible maximum increase of 12.7%, and a minimum increase of 2.3% if the rate changes are approved. These changes are expected to impact a program that consists of 35,981 policyholders. On average, policyholders will see an increase of $117 to their policy rates.

The companies have filed to change what they charge for transportation coverage, which is also known as rental car reimbursements. The rate for the coverage rose from $3 per vehicle to $24 per vehicle. Rental cars can be reimbursed by the companies so long as the rented cars are similar to their covered vehicle, and as long as the loss of the vehicle is covered by the customer's policy.

Safeco and First National insurance companies filed rate changes

Safeco and affiliate First National Insurance Company submitted a joint filing requesting approval for car insurance business in the state of California. Rates would increase by 6.7% to 6.9%, and are calculated to generate $32MM more in business for the companies - if the documents are approved by the California Department of Insurance. The individual minimum and maximum changes are summarized below, as the number of policyholders in scope.

Company

Average Rate ImpactPolicyholders AffectedRange of Individual Change
First National Insurance Co of America6.7%5372.5% - 9.2%
Safeco Insurance Co of America6.9%198,314-3.8% - 10.9%

Safeco has stated that its rate changes are due to the trends that lead to losses in various policies and that the increases are to prevent such losses as time goes on. This was determined based on analyzing various loss and claim trends across its policies.

The two companies state that the changes will affect the following programs:

  • Regular
  • Credit Union Members
  • Educators
  • Safeco Employees
  • Scientists and Engineers
  • California Medical Associations
  • Teensurance
  • Educated Workers

In order to show the impact for policyholders, we have broken down the data in a table, which can be found below. The data is sorted into the percentage of policyholders and the impact of the proposed changes.

Rate Change Impact (%)

% of Policyholders Affected
0 to 1%0.1%
1 to 2%0.2%
2 to 3%0.7%
3 to 4%2.0%
4 to 5%5.8%
5 to 6%15.2%
6 to 7%31.3%
7 to 8%29.8%
8 to 9%14.4%
9 to 10%0.3%

Rate increases and decreases in California for 2017-2018

While First National is owned by Safeco Insurance, Safeco is a subsidiary of Liberty Mutual Insurance Company. Of the companies included in this article, only Safeco and First National are ranked amongst the top companies in the state, and that's only under Liberty Mutual.

State Farm Group is the top auto insurer in the state with $3,656,000,000 direct written premiums. Liberty Mutual ranks 10th with $844,000,000 direct written premiums.

Within the top 13 companies, the approved rate changes so far this year have been very small. Currently, State Farm Group has the highest approved rate change at 0.1%. While only one company, American Family Insurance Group, has been approved for a rate decrease. However, the rate decrease averages under -0.1%.

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