Allstate’s plan to raise home insurance premiums by 34% approved by California officials
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California (KCAL/KCBS) — California announced that it will allow Allstate to raise home insurance premiums by 34% starting in November.
This move follows State Farm’s announcement that it will raise rates by 20%. Michael Soller, the Deputy Insurance Commissioner, explained that California’s insurance premiums are still lower than those of many other states despite the hike.
“California’s insurance rates, on average, are lower than many states, including large states like Florida or Texas,” he said. “We’re seeing the impact of disasters. Not just wildfires but winter storms — seeing the impact of climate change all across the nation. So, we’re not alone.”
Devastating fires are a big part of the increased cost of homeowner’s insurance. The state said they are taking measures to ensure homeowners get discounts if they take mitigation measures. While rates are rising, not everyone will see the same increases.
“An insurance rate is an average across the state,” Soller said. “It doesn’t mean that’s what you’ll pay. Because of the factors that go into your insurance premium, the amount you pay every year really depends on your property.” Additionally, companies will consider the home’s features and steps to prevent wildfire damage.
“It’s not a good deal by any stretch of the imagination, but we got as much as we could,” Consumer Watchdog spokesperson Jamie Court said. “Part of the problem was this rate hike was hanging out there for over a year.”
The organization helped negotiate the new rates. Court added that while it wasn’t a good deal, he’s happy that at least residents have insurance providers.
“The company did have a lot of costs that they had to recoup,” he said. “They’re still making a nice little rate of return.”
State officials are urging people with questions to call them if they feel like they’re getting treated unfairly.
“We always want folks to know if you have any questions about your insurance policy, if you’ve gotten a non-renewal notice, if you even want to understand why your rates are going up, we urge people to contact the Department of Insurance,” Soller said.
State officials said they are working to prevent providers from ending their policy deals with homeowners.
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