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Insurers overstated projected losses during California rate hike request, nonprofit says

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Insurers overstated projected losses during California rate hike request, nonprofit says


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Insurers overstated projected losses during California rate hike request, nonprofit says

By Teresa Moss
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Business Practices | Insurance

A Consumer Watchdog analysis found auto and home insurance companies overstated projected losses and inflation trends by millions of dollars when asking the California Insurance commissioner for double-digit rate increases late last year.

The nonprofit advocacy group says it challenged the rate hikes, which ultimately resulted in lower rates approved and a total savings of $884.8 million for California policyholders, according to a press release. Allstate and State Farm also agreed to lift restrictions on sales of new auto policies the companies implemented in 2022, the release said.

“California’s insurance market is in upheaval — insurance companies have created shortages by limiting sales of new policies across the state while at the same time pressing the insurance commissioner for massive premium increases,” said Pamela Pressley, Consumer Watchdog senior attorney, in a press release. “With mounting pressure on the commissioner by insurance companies to swiftly approve insurance companies’ requested rate hikes, close scrutiny of rate requests and consumer participation in a public, data-driven review process is more important than ever.”

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Farmers Direct Property and Causality Insurance, a division of Farmers Insurance, stopped writing new policies in California in September.

California Insurance Commissioner Ricardo Lara said last month that the state is looking into consumer claims about difficulty in securing auto insurance.

Consumer Watchdog was able to challenge the proposals under California Proposition 103, the release said. The proposition requires insurers to publicly open finances to prove they need requested rate increases.

Challenges Consumer Watchdog made relative to auto policies after reviewing proposals included:

State Farm Auto

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    • Overstated projected claims payments
    • Inflated projections for bodily injury and uninsured motorist claims
    • Failed to meet state law by removing costs for institutional advertising or advertising designed to improve the company’s image.

Allstate Auto

    • Overstated projected claims payments
    • ailed to meet state law by removing costs for institutional advertising or advertising designed to improve the company’s image.
    • Violated California Proposition 103 by limiting access to auto insurance products

GEICO Auto

    • Overstated projected claims payments
    • Failed to meet state law by removing costs for institutional advertising or advertising designed to improve the company’s image.
    • Claimed 25% of expenses were attributable to sales through agents but the company closed sales offices in California in 2022. In-house employees make policy sales over the phone or on the Internet.
    • Proposition 103 violations by using education and occupation as rating factors.

Similar challenges were made on homeowners relative to inconsistent net income for 2021 and inflated or unsupported projections for claims payments and rate calculations.

Through Consumer Watchdog’s challenges, Allstate will offer the same payment plan options for new and renewal policies to comply with Proposition 103, according to the release. Pacific Specialty Homeowners also will remove underwriting guidelines denying coverage for properties not showing pride of ownership or condemned dwellings.

Repairer Driven News previously reported that Allstate received the rate increase in California after CEO and President Tom Wilson made statements about dropping insurance consumers there if rates weren’t increased. He also threatened to drop costumers in New York and Jersey where he also received double-digit rate increases.

Two insurance companies recently requested double-digit increases in West Virginia, according to Insurance Journal. Progressive Classic Insurance Co. requested a 19.78% increase and Farmers Direct Property and Casualty Insurance Co. asked for a 19.9% increase.

A Value Penguin and Lending Tree report says auto insurance rates have increased by 29% nationwide since 2018. Rates increased 11.2% in 2023 and is expected to increase by 12.6% in 2024, it said.

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Featured image courtesy Bill Oxford/iStock

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Graph courtesy of Consumer Watchdog 

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California Central Valley city’s first-ever Pride event moves indoors after pushback

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California Central Valley city’s first-ever Pride event moves indoors after pushback


Oakdale’s first Pride event is moving forward this weekend after organizers changed venues following pushback over its original location and a planned drag performance.

Some residents pushed back over the event’s original location at Dorada Park and a planned drag performance.

“I also understand staff has issued a permit for a so-called Pride event,” one speaker said during the latest City Council meeting.

Another speaker raised concerns about the event being advertised as open to all ages, including children, and having a drag queen host.

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After the public pushback, organizers moved the event indoors to the Bianchi Center.

“It was a huge upgrade to be able to provide a more accessible space in the heart of Oakdale,” said Ryan Hall, president of CalPride.

Hall said the idea to bring Pride to the city did not come from outside Oakdale, it came from people living there.

“That’s my place as a mom of rainbow kids, absolutely,” said Elizabeth May, owner of Sisters Coffee.

May’s coffee shop hosts a monthly LGBTQ+ social.

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“I had a young man walk in here and say, ‘We don’t have anywhere to have a social here for LGBTQ.’ I said, ‘Heck yes,’” May said.

Still, the backlash has left parents like May concerned.

“How does it feel? Scary. I’m excited, but as a mom of a kid in the community, I’m nervous for them,” May said.

May said the venue change helped ease some of the tension.

“The different venue made a win-win situation for everyone. I was very proud of the kids for making that hard decision,” May said.

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For organizers, the drag performance is part of the celebration.

“Enjoy some line dancing, enjoy some live music, enjoy the drag show, and then also enjoy community members and our local businesses, our local artists and partner organizations,” Hall said.

Oakdale Pride is scheduled for Sunday from 10 a.m. to 2 p.m. Entry is free.



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Newsom urges a national ‘billionaires’ tax’ while fighting one in California

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Newsom urges a national ‘billionaires’ tax’ while fighting one in California


California Gov. Gavin Newsom, a Democrat who is considering a run for president as he approaches the end of his term, called for a national “billionaires’ tax” on Friday even as he fights another proposal targeting the wealthy in his home state.

Newsom also said the U.S. government should own a stake in artificial intelligence companies. His proposals, outlined in a Substack post, aligns him with the Democratic Party’s populist left, and he argued that urgent changes are needed to prevent the elite concentration of wealth and power from undermining democracy.

“It’s time for an economic reset for America,” Newsom wrote.

The governor announced his agenda a day after an influential health care union in California pledged to go forward with a ballot measure that would impose a one-time 5% tax on the assets of billionaires living in the state as of Jan. 1, 2026.

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Newsom opposes that measure, as do many of the liberal interest groups that typically favor higher taxes. They fear it would drive billionaires out of California, eroding the state’s tax base over the long term for a one-time influx of cash. A technology mecca, California has more billionaires than any other state — a few hundred, by some estimates.

“You may not be able to pick up and move to Texas or Florida to shelter your income from taxation, but I promise you that billionaires can, and do,” Newsom wrote. “Wealth is movable, and it shops for the state with the lowest taxes. The fight belongs at the federal level, where this broken system was created in the first place.”

A minimum tax on large net worths

Newsom said the solution is a new national tax policy, rather than a state-by-state system. He proposed a minimum tax on anyone with a net worth above $100 million. He also wants to make it illegal for the wealthy to borrow against their stock portfolios to fund their luxury lifestyles tax free.

Newsom said there should be new rules for inheritance taxes, warning that “the transfer of wealth among the ultra-wealthy will lock in a permanent American aristocracy of inherited wealth.” And he wants to raise corporate tax rates to where they were before President Donald Trump’s first-term tax cut.

READ MORE: Sanders and Newsom clash over proposed tax on California’s billionaires

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The need is especially urgent as artificial intelligence threatens to displace workers and further concentrate wealth, he wrote.

“We need to ensure every American owns a stake in the future being built by AI through a national public equity fund that takes a major stake in the new economy,” he wrote. “Simply, as artificial intelligence reshapes the country, every American should own a piece of the future it builds.”

Revenue generated by his proposals could be used to retrain workers, fund universal child care, make college free and increase funding for health care.

‘Money buys influence’

Newsom, who has drawn attention as one of Trump’s most high-profile political antagonists, is getting an early start on laying out a policy framework for his potential White House bid months before the midterm elections, which have typically marked the informal start of overt presidential campaigning.

WATCH: News Wrap: Newsom says Trump ordering DOJ to investigate him and wife

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The embrace of a wealth tax by Newsom, a moderate on tax policy despite his liberal reputation, signals a notable shift in the political landscape since Massachusetts Sen. Elizabeth Warren struggled to get traction in her 2020 campaign, which she largely centered around a 2% levy wealth tax.

Newsom portrayed the nation’s tax code as a corrupt system built to help an elite few.

“Money buys influence, and influence rewrites the rules,” he wrote. “Those rewritten rules funnel even more wealth to the few. Under this weight, democracy itself starts to buckle.”

A free press is a cornerstone of a healthy democracy.

Support trusted journalism and civil dialogue.

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This 1947 adobe home has found a new life as a ‘modern California hacienda’

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This 1947 adobe home has found a new life as a ‘modern California hacienda’


This is the latest instalment of The Inside Story, Wallpaper’s series spotlighting intriguing, innovative and industry-leading interior design.

Nestled at the base of the San Gabriel Mountains in Sierra Madre, a 1947 adobe home – a traditional building method using sun-dried bricks of organic materials – has been reimagined. Removed from the noise and polish of Los Angeles, this neighbourhood is shaded by California oaks, eucalyptus and pine, and shares its hillside with bears. It’s an unusual setting for a design story.

(Image credit: Michael P.H. Clifford)

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mid-century california home redesigned by Kirsten Blazek

(Image credit: Michael P.H. Clifford)

The home’s transformation began with a fire that destroyed much of the structure, leaving only the original adobe brick wall standing. Rather than rebuild from scratch, designer Kirsten Blazek of A1000XBetter chose to work with what remained.

‘The overall vision was to maintain as much of the original character and style of the home as possible, while making it more functional for modern living,’ she explains. New rooms were added – a kitchen, a primary suite, a family room – though the expansion was restrained. ‘We worked mainly within the original footprint,’ the designer notes, ‘only adding a small amount of square footage for the primary closet.’

mid-century california home redesigned by Kirsten Blazek

(Image credit: Michael P.H. Clifford)

mid-century california home redesigned by Kirsten Blazek

(Image credit: Michael P.H. Clifford)

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mid-century california home redesigned by Kirsten Blazek

(Image credit: Michael P.H. Clifford)

On the original adobe side, the layout was left untouched. The hallway windows, original to the 1947 build and ‘one of [Blazek’s] favourite features’, were preserved. ‘I wanted the house to feel like a modern California hacienda,’ she says of her guiding aesthetic, ‘and embraced that through every colour choice and finish.’



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