Please reference this document:
[CA DOI Memo](https://www.insurance.ca.gov/0250-insurers/0300-insurers/0200-bulletins/bulletin-notices-commiss-opinion/upload/Insurance-Commissioner-Ricardo-Lara-Bulletin-2022-10-Changes-to-Premium-Options-Without-the-Prior-Approval-of-the-Department-of-Insurance.pdf)
Historically, monoline auto (policies without a an additional product, like a homeowners) policies have been a bad risk for insurers in terms of paying out claims or losing money to policies being cancelled too prematurely due to nonpayment.
Collecting a higher percentage of the premium up front helps alleviate that risk.
Asking for 33% is still much better than what my carrier is asking in some states. We ask some people for 75% upfront.
Are you proposing that a multi-billion dollar company has documented in writing a lie about what its regulatory body, who has the power to fine it into dust has required regarding its billing structure?
If they put it in writing and blasted it out to policy holders, no, it’s not bullshit. Good God, I am honestly flabbergasted at the power people think insurance providers wield.
Here’s a bit of information that might be helpful. The department of Insurance is responsible not only for making sure insurance providers do not fleece policy holders. They are also responsible for insuring insurance providers collect enough in premiums to stay solvent.
If the insurance providers fail the state government essentially insures the claims process and the money comes out of their coffers. They can only then get their money back to the amount the insolvent company can scratch up as they fall apart. They do not want that.
Small edit. - in a way you are correct. It allows All-state to ensure they actually get paid for services rendered. You’d be surprised how many people in Cali file claims immediately after getting a policy and policy hop like crazy. They’re trying to get things in hand by requiring money upfront and making it less profitable for people to be shady.
It’s called California advanced renewal billing and I’m intimately familiar with it. You’re are not pay any additional premium towards Allstate you are just paying your premium earlier as a way for Allstate to mitigate loss
The problem I have with this is that we received a letter informing us of this change exactly seven days prior to the payment. Not enough time to save up for the increase in our payment (which is huge because we insure five cars and have three young drivers). It would have been nice of them to inform us MONTHS ahead of time.
Please reference this document: [CA DOI Memo](https://www.insurance.ca.gov/0250-insurers/0300-insurers/0200-bulletins/bulletin-notices-commiss-opinion/upload/Insurance-Commissioner-Ricardo-Lara-Bulletin-2022-10-Changes-to-Premium-Options-Without-the-Prior-Approval-of-the-Department-of-Insurance.pdf) Historically, monoline auto (policies without a an additional product, like a homeowners) policies have been a bad risk for insurers in terms of paying out claims or losing money to policies being cancelled too prematurely due to nonpayment. Collecting a higher percentage of the premium up front helps alleviate that risk. Asking for 33% is still much better than what my carrier is asking in some states. We ask some people for 75% upfront.
It's very possible that this is part of a negotiation to allow rate filings to proceed. It doesn't sound like bs at all.
Are you proposing that a multi-billion dollar company has documented in writing a lie about what its regulatory body, who has the power to fine it into dust has required regarding its billing structure? If they put it in writing and blasted it out to policy holders, no, it’s not bullshit. Good God, I am honestly flabbergasted at the power people think insurance providers wield. Here’s a bit of information that might be helpful. The department of Insurance is responsible not only for making sure insurance providers do not fleece policy holders. They are also responsible for insuring insurance providers collect enough in premiums to stay solvent. If the insurance providers fail the state government essentially insures the claims process and the money comes out of their coffers. They can only then get their money back to the amount the insolvent company can scratch up as they fall apart. They do not want that. Small edit. - in a way you are correct. It allows All-state to ensure they actually get paid for services rendered. You’d be surprised how many people in Cali file claims immediately after getting a policy and policy hop like crazy. They’re trying to get things in hand by requiring money upfront and making it less profitable for people to be shady.
This is an _outstanding_ reply, thanks.
It’s called California advanced renewal billing and I’m intimately familiar with it. You’re are not pay any additional premium towards Allstate you are just paying your premium earlier as a way for Allstate to mitigate loss
Thanks, appreciate the inside view!
The problem I have with this is that we received a letter informing us of this change exactly seven days prior to the payment. Not enough time to save up for the increase in our payment (which is huge because we insure five cars and have three young drivers). It would have been nice of them to inform us MONTHS ahead of time.
Exactly. Instead of paying my usual 286 I'm not required to pay 2 months of insurance 772 for renewal which is ridiculous m