Because of the possibility of wildfires, many Californians are seeing increases in their house insurance rates and cancellations.
More than 350,000 Allstate home insurance consumers may see significant pricing increases. The California Department of Insurance is authorizing the corporation to boost premiums by an average of 34%.
“Under Prop 103, the consumer protection law passed by voters more than 30 years ago, insurance companies have the freedom to choose where they write policies and how much they charge,” Department of Insurance spokesperson Michael Soller said. “They can file for rates at any level with no requirement that they write more policies.”
Mark Slater is experiencing the insurance problem. After 20 years with Allstate, and no claims, he received a letter stating that his home insurance would not be renewed.
“I’ve paid my fair share into the insurance company,” Slater told the reporter. “Now, they’re just throwing me, kicking me to the curb — and you know, saying, ‘see you later.'”
Slater lives in a Santa Clarita community with a hill in the backyard. It’s now classified as a high-risk fire zone. He called seven different organizations to request a quote.
“Of the seven, six of them said, ‘We’re no longer servicing in California in your area,'” Slater told me. “The seventh one, it was seven times the amount I’m currently paying that they quoted me.”
The Department of Insurance is enacting new laws that will allow for rate increases in exchange for companies writing additional policies around the state. It also collaborates with Cal Fire to mitigate the risk of wildfires.
“We need insurance companies writing in all parts of the state, and that’s really, you know, the way we’re going to drive down costs in the long term and we’re going to make people safer,” according to Soller. “We’re going to get insurance companies back writing policies.”
According to the Department of Insurance, the new regulations will go into effect by the end of the year, and with more companies issuing insurance, the market should become more stable.
Current Allstate customers may see an increase in their bills for their first renewal after November 7.