The California Department of Insurance has authorized Allstate to raise homeowners’ premiums by an average of 34%, effective November. This marks the largest increase granted to any insurance provider in the state over the past three years.
The premium hike will impact over 350,000 policyholders, with the most significant increases occurring in Fresno, Madera, and Mariposa counties, according to the San Francisco Chronicle.
As the fourth largest property and casualty insurer in California, Allstate cited several factors contributing to the rate increase. In a statement, the company emphasized the necessity of the hike due to rising home values, increased repair costs, and the growing incidence of severe weather events across the state. The current median home price in California stands at $904,210, as reported by the California Association of Realtors.
Wildfire risk is particularly pertinent in determining insurance premiums, with Allstate highlighting the prevalence of such fires during California’s hot weather. The company reassured customers that this rate adjustment will help maintain their existing coverage while working with the Department of Insurance to enhance availability and sustainability within the homeowners’ insurance market.
Allstate also announced plans to offer discounts to customers who take proactive measures to mitigate wildfire risks on their properties.
Despite the upcoming rate increase, Deputy Insurance Commissioner Mike Soller noted that California’s insurance rates remain lower than those in several other states, including larger markets like Florida and Texas. However, he acknowledged that wildfires and winter storms have influenced rising rates.
Soller encouraged homeowners with questions about their policies or concerns regarding rate increases to reach out to the Department of Insurance. The department can be contacted via its consumer hotline at 800-927-4357, or at its offices in Los Angeles, Sacramento, and Oakland.
In addition to Allstate, State Farm is also seeking approval from the Department of Insurance for a 30% increase in homeowners’ premiums, according to various reports.
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