Come November, Allstate will be raising home insurance premiums for policyholders in California by an average of 34.1%, representing what has been described as the most significant rate increase by a major insurer in the state over the past three years.
The approved prices will affect around 350,000 insureds across California, where a property insurance crisis already exists, Bloomberg reported. Documents filed by Allstate indicate that the premium changes will vary widely, with some seeing hikes as steep as 650%, while others could experience decreases of up to 57%.
In California, major insurers such as State Farm and Farmers Insurance have scaled back their operations, blaming the growing financial pressures from wildfires and longstanding regulatory constraints that have limited their ability to raise rates.
Allstate, meanwhile, halted the issuance of new homeowner policies in the state in 2022, attributing its decision to the increasing financial risks in the market.
In a statement, spokesperson Michael Passman said: “Higher home values and repair costs coupled with more frequent, severe weather lead to higher payments to help customers recover, so we need to adjust rates to better reflect the cost of protecting our customers.”
The San Francisco Chronicle, which first covered the upcoming adjustment, highlighted that the last notable increase was in 2021 when Homesite Insurance received approval for a 38.2% hike. According to the publication, Fresno, Madera, and Mariposa counties will see the biggest jumps.
Allstate’s move follows a series of similar changes by other insurers. State Farm, for instance, is currently seeking an additional 30% bump after already securing a 20% increase earlier this year.
The California Department of Insurance is still evaluating State Farm’s latest request, with Insurance Commissioner Ricardo Lara raising concerns about the company’s financial health.
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