Amid the ongoing insurance crisis in California, Allstate said it would resume selling new policies in the Golden State should regulators adopt proposed regulatory changes to make it easier for insurers to raise rates.
“If the regulations were in effect today, we would begin selling new homeowner insurance policies tomorrow,” Gerald Zimmerman, senior vice president of government relations for Allstate, said in a public hearing, Bloomberg reported.
“Let me repeat that: As soon as we can use catastrophe modeling and incorporate the net cost of reinsurance into our rates, we will be open to business in nearly every part of California.”
Catastrophic models is a risk management tool used by insurance companies, businesses and regulators to assess the potential losses caused by a catastrophic event.
The company confirmed the news to KTLA in a statement.
“We’re working with the California Department of Insurance to improve insurance availability in the state. Once home insurance rates fully reflect the cost of providing protection to consumers, we’ll be able to offer home insurance policies to more Californians with timely rate approvals, the use of our advanced wildfire modeling and reinsurance costs.”
Allstate stopped issuing new insurance policies for all business and personal property in California back in 2022. Since then, companies like State Farm, Farmers Insurance and The Hartford have made similar business moves.
Companies have said they are cutting back on business in California due to the increasing severity of natural disasters, like wildfires, and state regulations limiting the cost of policies.
In 2021, California Insurance Commissioner Ricardo Lara announced new insurance protections in effect for the summer wildfire season, increasing payouts and evacuation benefits for wildfire survivors.
The new protections would mean “larger payouts for some claims and less red tape from insurance companies,” according to Lara.
In 2022, the commissioner also enforced the new insurance pricing regulation under the Safer from Wildfires framework, requiring insurance companies to provide discounts to consumers who follow safety measures such as upgraded roofs and windows to prevent wildfire risks.
Due to the swift withdrawal of insurance companies statewide, legislation has been introduced to help mitigate the ongoing problem, but no measure has been signed into law yet.
FAQs
Allstate says it will insure California homes again, under one condition. Amid the ongoing insurance crisis in California, Allstate said it would resume selling new policies in the Golden State should regulators adopt proposed regulatory changes to make it easier for insurers to raise rates.
Is Allstate no longer insuring homes in California? ›
Allstate currently does not write new home insurance policies in California, though it renews existing ones. It could resume writing new home policies once insurance market reforms are enacted in California.
Are some houses uninsurable? ›
In the housing market, an uninsurable property is one that the FHA refuses to insure. Most often, this is due to the home being in unlivable condition and/or needing extensive repairs.
Is it illegal to not have homeowners insurance California? ›
You're not required by law to have home insurance, but banks do require it as a condition of your mortgage. Home insurance can help you protect yourself from enormous financial loss. It can also help cover the cost of paying for bodily injury to others or damage to their property.
Why did homeowners insurance go up in California? ›
Robert Chapman Wood, an economics professor at San Jose State University, said the insurance market instability is driving the large premium increases. "Right now the insurance companies are sort of in a panic," Wood said. "And they're grabbing whatever they can."
Why did Allstate pull out of California? ›
Both companies have said they will no longer offer new policies due to climate change-fueled disasters and high building costs. Since 2017, the largest and deadliest wildfires to happen in state history have destroyed more than 50,000 homes, buildings, and other structures in California.
Is State Farm cancelling homeowners insurance in California? ›
State Farm: Non-Renewed Policies by Zip Code
Last month, State Farm issued a written statement explaining its decision to no longer write new policies for new California homes and to end coverage for about 50,000 existing California customers.
Who is still selling homeowners insurance in California? ›
Hippo: Our pick for fast quotes
- Hippo: Our pick for fast quotes.
- Liberty Mutual: Our pick for discounts.
- Farmers: Our pick for customizable coverage.
- Progressive: Our pick for bundling.
- Nationwide: Our pick for inclusive standard coverage.
- USAA: Our pick for club members.
How much is homeowners insurance in California? The average cost of homeowners insurance in California is $1,383 per year, or roughly $115 a month, for an insurance policy with $300,000 in dwelling coverage.
Is CA earthquake insurance worth it? ›
Without earthquake insurance coverage in California, you will be responsible for 100 percent of the cost to repair your home, and replace your belongings after a damaging earthquake strikes. Given the potential cost to repair shake damage, the cost of a CEA policy may be an easy expense to justify.
The auto insurance market in California is in distress. Over the last year, several large insurance companies, such as GEICO, Allstate, and most surprisingly, Liberty Mutual have pulled out of California's auto insurance market.
Why are insurance companies cancelling policies in California? ›
The companies have cited high inflation, catastrophe exposure, reinsurance costs and the limitation of decades-old insurance regulations as reasons for scaling back policies in the state.
Why is the CA Fair Plan so expensive? ›
Contrary to popular belief, the CA FAIR Plan is not a government-backed program: it is financially supported by California's private home insurance companies, not taxpayers. Recent turmoil in the California home insurance market has left the FAIR Plan overburdened, strained and increasingly expensive.
Who still offers home insurance in California? ›
5 Best Homeowners Insurance Companies in California
- Hippo: Our pick for fast quotes.
- Liberty Mutual: Our pick for discounts.
- Farmers: Our pick for customizable coverage.
- Nationwide: Our pick for inclusive standard coverage.
- USAA: Our pick for club members.
Tokio Marine and Trans Pacific join State Farm and Allstate in discontinuing coverage for California residents.
Why are home insurers leaving California? ›
Over the past two years, many home insurers — including State Farm and Allstate — have stopped writing new policies in California. Others have left the state altogether. Many have cited unprofitability due to wildfires, inflation and the cost of rebuilding.
Is Allstate renewing home insurance? ›
SANTA ROSA, Calif. (KGO) -- Allstate, one of California's biggest home insurers, could resume writing new homeowner policies if the department of insurance approves rule changes. The company stopped writing new homeowner policies in late 2022 because of wildfire risk and the cost of rebuilding homes.
