| Ticker | Status | Jurisdiction | Filing Date | CP Start | CP End | CP Loss | Deadline |
|---|
| Ticker | Case Name | Status | CP Start | CP End | Deadline | Settlement Amt |
|---|
| Ticker | Name | Date | Analyst Firm | Up/Down | Target ($) | Rating Change | Rating Current |
|---|
https://www.sfchronicle.com/california/article/allstate-home-insurance-rate-hike-19728352.php
Allstate has been approved for the largest rate increase in California of any major insurer in the past three years.
This month, the Department of Insurance approved Allstate's request to hike its home insurance rates by an average of 34.1% for its roughly 350,000 California customers. Within that average, some homeowners could see their rates decrease as much as 57%, while at least one will see rates increase by nearly 650%. Allstate customers will see the increase appear on their bill at their first renewal date following November 7, according to the company's filings with the state.
It's the largest increase of a top insurer since 2021, when Homesite Insurance Company — a subsidiary of American Family Insurance, the 12th largest insurer in California — was approved to raise homeowner rates by 38.2%. Allstate's increase only applies to homeowners insurance, but the company also has an open request to raise rates for condominium owners by an average of 30%.
In its filing, Allstate said the increase was motivated by an increased number of claims for water and fire damage.
"Our payments to help California residents recover from accidents and disasters have increased significantly in recent years due to higher repair costs, more frequent and severe weather and legal system abuse," an Allstate spokesperson previously told the Chronicle.
Data included in the company's filings show that the greatest increases will happen in Fresno, Madera and Mariposa counties. A lone homeowner in the 95325 ZIP code in Mariposa County will see their rates increase by 385%, while the 95369 ZIP code in Merced County will see rates go up an average of 214%. Homeowners in Sonoma and Napa counties will also see particularly large increases, with rates in the 95442 ZIP code in Sonoma rising an average of 164%.
Such rate hikes are a harbinger of what could come in the future, experts say. Over the past few years, California insurers have asserted that the state's Proposition 103 — which requires companies to get prior approval before raising rates and, uniquely among the 50 states, bans the use of forward-looking risk models when pricing wildfire risk — has kept them from accurately pricing the risk they're taking on. In response, many have severely limited the new policies they write. Allstate and State Farm have even stopped writing new policies altogether.
In April, an Allstate representative promised regulators at a public workshop that it would start writing homeowners policies for new customers again soon. But first, it would need to be able to "fully reflect the cost of providing protection to customers" — meaning prices would need to go up. Allstate ceased writing new homeowners policies in November 2022.
The company did not immediately clarify whether the new rate increase would cause it to resume writing new policies in California.
Allstate's rate hike is hardly the only major rate hike to be approved in recent years. In March, the Liberty Mutual subsidiary Safeco was approved to increase rates an average of 10.5%. That month, State Farm, the state's largest home insurer by far, also increased its average rates by 20%. Since then, State Farm has also requested another 30% rate increase in a sign of financial distress. That request is pending.
Even the FAIR Plan — California's state-created but privately-run "insurer of last resort" — has said it will need a "substantial increase" in prices in the near future.
Posted In: ALL
