Allstate is now increasing home insurance rates in California by 34%, making it the largest rate increase among major insurers in the state.
This month, the Department of Insurance approved Allstate’s request to raise home insurance rates by an average of 34.1% for approximately 350,000 customers in the state, per Bloomberg.
While some homeowners may experience decreases of up to 57%, at least one customer could face a nearly 650% increase.
The new rates will be reflected in bills at the first renewal date after November 7, as outlined in the company’s filings with the state.
This is the largest rate increase by a major insurer since 2021, when Homesite Insurance Co., a subsidiary of American Family Insurance, was approved for a 38.2% hike in homeowner rates.
Allstate’s increase pertains solely to homeowner’s insurance, but the company also has a pending request to raise rates for condominium owners by an average of 30%.
“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,” a company spokesperson said in a statement.
A company spokesperson did not specify when the insurer would start accepting new policies again.
The conditions for resuming new policies include implementing a series of reforms known as the Sustainable Insurance Strategy, which Insurance Commissioner Ricardo Lara has pledged will be ready by year-end.
These reforms aim to change the pricing formulas and expedite the approval process for rate adjustments, reports SF Chronicle.
Experts believe these changes may enable insurers to increase their prices further.
In return, they will be expected to write more policies in regions most affected by the insurance crisis.
“Under Proposition 103, insurance companies are increasing their rates — legally — but they are not writing more policies. That is the problem Commissioner Lara is solving with the Sustainable Insurance Strategy,” Michael Soller, deputy insurance commissioner with the Department of Insurance, said in a statement.
He added: “California still has lower insurance costs on average than many large states.
Increasing availability is how we will get to affordability in all areas.”
