A California property owner was hoping for a new policy, but the nation’s largest homeowners insurance company is no longer offering it.
allstate, state fourth largest The property and casualty insurer said in an email that it has stopped selling new residential, condominium and commercial insurance in California. The insurance giant recently announced it would no longer offer coverage because worsening weather and rising construction costs are making it difficult to operate in the nation’s most populous state.
State Farm, California’s largest homeowners insurance company, made a similar decision “The danger of catastrophe is rapidly increasing,” he said last week. Allstate stopped accepting new policies in the state last year, according to a statement.
“Last year, we suspended new homeowner, condominium and commercial insurance policies in California so that we can continue to protect our existing customers,” Allstate said in a statement. “The cost of insuring new California homeowners is much higher than their insurance premiums due to wildfires, rising home repair costs, and high reinsurance premiums.”
The news was first reported by San Francisco Chronicle.
Allstate’s decision in California is seen across the nation as insurers raise rates, limit coverage, or terminate business entirely in areas susceptible to climate change and natural disasters. It follows a pattern.In Florida, most major insurance companies pulled out of the state, Homeowners rely on small private companies to protect their homes in the face of typical severe storms, and their resources are stretched to the limit.
Allstate, in a statement, cited other factors for the moratorium on California’s new policy, including state regulation and inflation, which has led to higher reconstruction costs.
This isn’t the first time Allstate has restricted the sale of new homeowners insurance in California.did so in 1994, after the Northridge earthquake. The company eventually returned to the state, but in 2007 again suspended new policies for homeowners in the state. After 10 years, it’s back in the California market.
A joint move by California’s Allstate and State Farm may encourage more property owners in the state to turn to state-provided FAIR plans.insurance company of last resortIn areas with high fire risk. By 2022, there will be over 270,000 FAIR policies, more than double the coverage offered in 2018. Worsening wildfires and the outflow of traditional insurers from fire-risk areas have led some homeowners to rely on the program. More expensive, fire compensation.
The FAIR Plan requires insurance companies doing business in California to cover losses proportional to their market share in the state.