Allstate will insure California homes again, under one condition
Author: Nadia Lopez
Original article here.
(Bloomberg) — Allstate Corp. will end its years-long pause on underwriting in California as soon as the state regulator adopts proposed regulatory changes to make it easier for insurers to raise rates, according to a company spokesperson.
"If the regulations were in effect today, we would begin selling new homeowner insurance policies tomorrow," said Gerald Zimmerman, senior vice president of government relations for Allstate, in a public hearing on April 23. "Let me repeat that: As soon as we can use catastrophe modeling and incorporate the net cost of reinsurance into our rates, we will be open to business in nearly every part of California."
The testimony marks the first time a large property insurer has publicly promised return to the market in the disaster-prone state if the new regulations are implemented.
More than half of the major property insurers in California have cut back on business in the state in recent years in response to the increasing severity of wildfires, as well as state regulations that limit the cost of policies.
While Allstate is mulling resuming business in the state, two property carriers recently decided to exit the California market. Further, State Farm said in March 2024 that it would be non-renewing an additional 72,000 California policies across personal and commercial lines.
Insurance Commissioner Ricardo Lara says the proposed reforms, which would not need legislative approval or to be signed by the governor, represent the biggest changes to the state's insurance market since 1988. Specifics have been scant and the overhaul is still in draft form, but Lara expects the process to be complete by the end of the year.
