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 not offering insurance in California? ›
Allstate Insurance stopped writing new homeowners policies in California two years ago but says it may start offering them again if the state Department of Insurance will allow them to use catastrophic modeling when requesting rate increases.
Is Allstate writing homeowners insurance 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.
Why sometimes homeowners can't get insurance? ›
High-Risk Location
It could be that your home is located in a neighborhood that experiences a lot of crime. If so, an insurance company will be wary of the fact that you may incur property damage from vandalism or theft. If you live too far away from a fire station or fire hydrant, that could also disqualify you.
Why did Allstate pull out of California? ›
Like State Farm, which announced a similar move last week, Allstate cited worsening climate conditions that had made doing business there difficult. California property owners hoping to open new insurance policies are no longer able to do so with one of the nation's largest homeowner insurance companies.
Why are insurance companies not insuring in California? ›
California regulates insurance companies and their rate increases, so a number of insurance companies have simply pulled out of the state. It's one reason it's getting harder to find a policy.
Is Allstate dropping homeowners insurance? ›
No.
Allstate, the fourth largest insurer in California by market share, quietly stopped writing new homeowners policies in November 2022. A company spokesperson told the Chronicle that the decision was due to the cost of wildfire risk, reconstruction costs and reinsurance premiums.
Who still insures homes in California? ›
5 Best Homeowners Insurance Companies in California
| Provider | Average Annual Premium | A.M. Best |
|---|
| Hippo | $1,021 | A- |
| Liberty Mutual | N/A | A |
| Farmers | $1,966 | A |
| Nationwide | $1,506 | A |
1 more rowMay 22, 2024
Home insurance in California is not a legal requirement. However, if you have a mortgage or loan on your home, your financial lender will likely require you to carry a certain amount of coverage.
Starting in July 2024, State Farm will stop insuring more than 30,000 residential homes in California, and starting in August, will discontinue coverage on 42,000 commercial apartment properties.
Why is California becoming uninsurable? ›
The growing risk of wildfire means that some parts of California are becoming "essentially 'uninsurable'," according to a new analysis from the First Street Foundation, a non-profit that studies climate risks, shared first with CBS News.
Is it hard to get homeowners insurance after being dropped? ›
If your insurer nonrenewed or cancelled your policy because your house needs repairs or you filed too many claims, you may have difficulty finding an insurance company willing to insure your home.
What should you not say to homeowners insurance? ›
Avoid admitting fault or underestimating damages as this might lead to lower compensation or even denial of your claim. Honesty is crucial when dealing with an insurance adjuster, so avoid providing false information which can lead to serious consequences like claim denial or legal repercussions.
What would happen if a homeowner had no homeowners insurance? ›
Without this coverage, lenders can withhold payments or even deny loans altogether. Not having homeowners insurance can also have financial implications beyond just legal ones. If an accident or disaster were to occur, the homeowner would be responsible for paying for all repairs and replacements out-of-pocket.
Why did my home insurance go up for no reason? ›
Your homeowners insurance can go up for many reasons, such as: Filing a claim. Inflation. Living somewhere that's prone to natural disasters or extreme weather.
What insurance companies are no longer in California? ›
Tokio Marine and Trans Pacific join State Farm and Allstate in discontinuing coverage for California residents.
Why is Allstate not taking new customers? ›
Allstate, one of the nation's largest insurance companies, has joined State Farm in deciding to halt sales of property and casualty coverage to new customers in California, saying it's too pricey to underwrite policies in the state which has seen thousands of natural disasters in recent years.
What is going on with insurance companies in California? ›
The state has been hammered by wildfires, storms and other extreme weather events over the last few years that have roiled its insurance market. Since 2022, seven of the top 12 insurance companies in California have paused or restricted new business, according to the state's Department of Insurance.
Who took over Allstate insurance? ›
First announced in January 2021, the deal involved total proceeds of $4 billion, which included Blackstone's $2.8 billion purchase price, as well as increases in statutory surplus since March 31, 2020. Following its acquisition by Blackstone, the ALIC business will be renamed as Everlake Life Insurance.
