In yet another sign of instability across California’s home insurance market, Allstate is seeking to raise policyholders’ premiums by an average of 34%.
The insurance giant, the sixth-largest provider in the state, is asking regulators to approve what would be its steepest California rate hike in at least seven years. The increase would affect more than 350,000 homeowners.
The request follows double-digit rate hikes by many major insurers in the state in recent years. It also comes as State Farm, the state’s largest provider, is asking the California Department of Insurance for permission to boost homeowner premiums by 30%.
“Consumers have been hard hit by the massive rate increases insurance companies have imposed recently, and Allstate customers would be in the same situation,” said Carmen Balber, executive director of Consumer Watchdog, a consumer advocacy group that has challenged the rate hike. Allstate last raised rates by 4% in September.
Providers, meanwhile, have suffered billions of dollars in losses during recent catastrophic wildfire seasons. Even as regulators have approved more rate increases, insurers argue that California’s strict regulations on setting premiums have left them in an untenable situation.
They’ve dropped hundreds of thousands of policyholders in fire-prone areas such as Sonoma and Napa counties and the Santa Cruz Mountains. Some companies, including Allstate and State Farm, have even stopped writing new home insurance policies anywhere in California.
In a statement, Allstate said the proposed rate hike is necessary to cover higher insurance payouts due to more frequent and severe weather events, growing repair costs amid inflation and “legal system abuse.” The company did not provide details on the specific legal issues.
Under Allstate’s proposed increase, the majority of policyholders — including those in the Bay Area — would see their premiums jump between 20% and 40%. However, around 5,000 to 7,000 homeowners…
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