In the midst of California’s protracted insurance crisis, Allstate says it may soon resume writing new policies, subject to certain conditions.
Allstate Insurance stopped issuing new homeowners policies in California two years ago, but says it may resume offering them if the state Department of Insurance allows them to propose rate increases using catastrophic modeling.
Catastrophic models are computer-generated studies that simulate possible catastrophic occurrences and can be used to justify rate increases.
Allstate cited wildfire risk, the expense of reconstructing houses, and escalating reinsurance premiums as reasons for suspending new policy in 2022. The corporation continued to renew its existing policy.
According to a press release, Allstate said: “Once home insurance rates fully reflect the cost of providing protection to consumers, we’ll be able to offer home insurance policies to more Californians with timely rate approvals, the use of our advanced wildfire modeling and reinsurance costs.”
Later Thursday morning, the Little Hoover Commission was planned to convene a public hearing in Sacramento to discuss the state home insurance market, featuring speakers from the governor’s Office of Emergency Services, California’s FAIR plan, and other experts.
Also slated for Thursday is a town hall in Hillsborough with state Sen. Josh Becker, Department of Insurance specialists, and unified policyholders to discuss the state’s insurance situation.
Allstate did not specify a clear date for when it will begin changing policies. The Insurance Department intends to enact regulations by the end of the year.