In response to California’s ongoing insurance challenges, Allstate has signaled its intention to resume writing new policies in the state, subject to certain conditions.
The insurance giant ceased offering new homeowners policies in California two years ago but is now considering a return pending approval from the state Department of Insurance to incorporate catastrophic modeling in rate increase requests.
Catastrophic modeling involves computer-generated scenarios that simulate potential large-scale disasters, which could be used by Allstate to justify necessary rate adjustments.
Allstate’s decision to halt new policies in 2022 was influenced by several factors, including heightened wildfire risks, the escalating costs of home reconstruction, and the rising expense of reinsurance. Despite this, the company has continued to renew existing policies.
In a recent statement, Allstate emphasized the importance of aligning home insurance rates with the true cost of providing protection to consumers. They expressed confidence that with timely rate approvals, advanced wildfire modeling, and manageable reinsurance costs, they can expand access to home insurance coverage for more Californians.
On Thursday morning, the Little Hoover Commission convened a public hearing in Sacramento to address the state of the home insurance market. Speakers included representatives from the governor’s Office of Emergency Services, California’s FAIR plan, and other industry experts.
In addition, a town hall meeting was scheduled in Hillsborough on the same day, where State Senator Josh Becker, officials from the Department of Insurance, and representatives from united policyholders convened to discuss the ongoing insurance crisis in California.
