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Allstate car insurance has been ordered to cut car insurance rates by 15.9% for residents in California. The news is likely to have a big effect on Allstate’s bottom line with the company insuring about 10% of the states cars. The rate cut comes into effect on April 14 and will result in average savings of $124 per vehicle.
The order comes at more than twice the rate cut Allstate had sought permission for. The California Department of Insurance had calculated that a rate cut of 19.4% was merited, however a state judge gave Allstate credit for providing services to low-income neighborhoods and brought the final rate reduction down to 15.9%.
The company feels it has been unfairly targeted and has been forced to cut rates by a larger percentage than other insurance companies.
