LOS ANGELES, March 6, 2025 -- Consumer Watchdog reached a settlement this week with General Insurance Company of America and the California Department of Insurance, resolving the company's application with the Department for a rate increase of 7.33% to its homeowners line of insurance and saving California policyholders a total of $25 million.
General originally sought a rate increase of 13.7%. Consumer Watchdog challenged the rate hike as excessive under Prop 103 and the Department's ratemaking regulations, which require insurers to justify all rate changes prior to implementation. Read Consumer Watchdog's Petition here.
Specifically, Consumer Watchdog challenged General's trend selections as overstating projected losses, resulting in an inflated rate indication.
"Public involvement plays a vital role in keeping insurance companies in check and preventing excessive rate hikes," said Consumer Watchdog Staff Attorney Benjamin Powell. "This case demonstrates that when companies are challenged on their unjustified rate increase requests, consumers see tangible financial benefits."
Consumer Watchdog requested that General provide further information in order to substantiate its claims about projected losses and other information in its application. Answers to multiple rounds of questions Consumer Watchdog posed to the company showed a lower rate increase of 7.4% was warranted. General's newly-approved rate will have an effective date of May 28, 2025, and will affect more than 200,000 policyholders.
California's voter-approved insurance reform law, Proposition 103, requires that insurers open their books and prove they need to raise rates in a process subject to full transparency, in which consumer representatives have the right to review and challenge improper rates and practices. According to the Consumer Federation of America, Prop 103 has saved California motorists over $154 billion since 1989. Consumer Watchdog has saved California consumers over $6.5 billion over the last 22 years by challenging excessive and unfair auto, home, business, and medical malpractice rates.
For more information about Proposition 103 visit: https://consumerwatchdog.org/prop-103/
Download the settlement stipulation here.
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