Loophole allows Georgia car insurers to raise rates by up to 40%. A new bill could change that

A bill that has now passed both houses of the Georgia General Assembly is designed to keep Georgia auto insurance rates under control.

The bill ends the practice known as “file and use”. Georgia Insurance Commissioner John King calls it a “loophole” in state law that allows auto insurers to unilaterally raise rates without state regulatory approval.

For months, Channel 2 Action News Investigates has been telling you about a loophole in Georgia law.

In August Channel 2 Consumer Investigator Justin Gray reported how insurance giant Allstate used file and use to raise rates a total 40 percent for Georgia customers in less than a year.

“This will prevent those outliers and now everybody will know you have to go through a process and it’s going to be transparent. You come to the commissioner, you show your data,” King said.

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House Bill 221 gives the Commissioner the ability to review all car insurance rate filings before they go into effect, closing a loophole that insurers had previously exploited to increase rates by as much as 25% in a single filing.


King says without the new law, more insurers likely would have followed Allstate’s lead in using file and use to raise rates.

“If one company was allowed to use this loophole all the other companies would be forced to use the same loophole because of the market forces. Now we all have the same playing field,” King said.

Atlanta resident Henry Makori says his car insurance payments have gone up multiple times in the past two years.

“Car insurance is crazy. It’s being ridiculous right now. It makes you not even want to own a car, makes you want to walk everywhere,” Makori said.

The bill gives the Commissioner 60 days to review all filings for rate increases.

Allstate told us in a statement: “We support HB 221 as passed by the General Assembly and congratulate Commissioner King on his successful effort to advocate for Georgia consumers while preserving a healthy and competitive auto insurance market.”

If and when it is signed into law by Governor Brian Kemp, it would go into effect on July 1st.