Consumer Watchdog, a nonprofit consumer advocacy group, announced that it has saved California insurance policyholders more than $800 million by challenging proposed auto and home insurance rate increases from providers including Allstate and State Farm. Despite these savings, data indicates that Californians still bear some of the highest insurance costs in the nation.
The revised rate increases that have now been approved will impact more than 9 million California policyholders, who will now save a total of $884.8 million, according to a press release from Consumer Watchdog.
As per Bankrate's analysis, California continues to experience higher than average car insurance costs. The average cost of full coverage car insurance in California is $2,692 per year, compared to the nationwide average of $2,545. In Los Angeles specifically, drivers pay an average of $2,992 for full coverage car insurance.
A report from the Insurance Information Institute (III) found that legal system abuse is contributing to rising insurance costs for policyholders while resulting in losses for insurance providers. "Legal system abuse occurs when policyholders, plaintiff attorneys, or other third parties use fraudulent or unnecessary tactics in pursuing an insurance claim payout, increasing the time and cost of settling insurance claims," III said in its report. These "tactics" include the involvement of third-party funders in lawsuits and seeking outsized payouts.
According to its website, Consumer Watchdog is a nonprofit organization that advocates for taxpayers and consumers. The organization was founded in 1985 in California.