Allstate plans to boost its California homes insurance premiums by an average of 34%, the highest rate increase of the year.
According to the state Department of Insurance, Allstate requested a 39.6% hike last year before amending it to 34.1% in January.
The insurance cited higher repair expenses, more frequent severe weather events, and legal system misuse as reasons for the rise. The premium increase has the potential to effect almost 350,000 policyholders.
Allstate will stop selling new California homeowner insurance policies in November 2022, while the business gained clearance for a 4% rate increase last year.
Carmen Balber, President of Consumer Watchdog, is challenging Allstate’s move.
“To be frank, it has been very difficult to get full disclosure from the company about the secret black box model that it uses to determine wildfire risk,” she said.
Residents feel impact of skyrocketing rates
Hari and Diana Barnes, who live in Tujunga, said they’ve seen their home insurance premium cost go up over the last five years.
“Ours went from $1,000 a year to $10,000 a year,” said Diana.
“We have shopped around. It’s not for the best rate, it’s for anyone who will insure us.”
But Balber suggests those who are shopping for home insurance to consider the following:
“What kind of discount might I qualify for if I do things like replacing my roof, or clearing the brush and the trees around my home, can that reduce my insurance rate?”
Allstate’s request remains under review.