Allstate is now increasing home insurance rates in California by 34%, making it the largest rate increase among major insurers in the state.
This month, the Department of Insurance approved Allstate’s request to raise home insurance rates by an average of 34.1% for approximately 350,000 customers in the state, per Bloomberg.
While some homeowners may experience decreases of up to 57%, at least one customer could face a nearly 650% increase.
The new rates will be reflected in bills at the first renewal date after November 7, as outlined in the company’s filings with the state.
This is the largest rate increase by a major insurer since 2021, when Homesite Insurance Co., a subsidiary of American Family Insurance, was approved for a 38.2% hike in homeowner rates.
Allstate’s increase pertains solely to homeowner’s insurance, but the company also has a pending request to raise rates for condominium owners by an average of 30%.
“Higher home values and repair costs coupled with more frequent, severe weather lead to higher payments to help customers recover, so we need to adjust rates to better reflect the cost of protecting our customers,” a company spokesperson said in a statement.
A company spokesperson did not specify when the insurer would start accepting new policies again.
The conditions for resuming new policies include implementing a series of reforms known as the Sustainable Insurance Strategy, which Insurance Commissioner Ricardo Lara has pledged will be ready by year-end.
These reforms aim to change the pricing formulas and expedite the approval process for rate adjustments, reports SF Chronicle.
Experts believe these changes may enable insurers to increase their prices further.
In return, they will be expected to write more policies in regions most affected by the insurance crisis.
“Under Proposition 103, insurance companies are increasing their rates — legally — but they are not writing more policies. That is the problem Commissioner Lara is solving with the Sustainable Insurance Strategy,” Michael Soller, deputy insurance commissioner with the Department of Insurance, said in a statement.
He added: “California still has lower insurance costs on average than many large states.
Increasing availability is how we will get to affordability in all areas.”
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Also Read: Harris Proposes Building A Whopping 3 Million New Homes
Other Economy News Today
Kamala Harris proposes building a whopping 3 million new homes as well as a new tax incentives for builders that construct properties.
Democratic U.S. presidential candidate Kamala Harris also proposed a $25K first-time homebuyer subsidy to help assist families on their down payment.
However, there are economists and housing experts who have already begun to express their skepticism amidst the current housing crisis.
One of the biggest issues cited is that there is simply too much demand and not enough supply.
The Harris-Walz campaign unveiled its first economic policy plan, aiming to ease the financial burden on American families.
The plan includes a proposal to provide $25,000 grants to over a million first-time homebuyers with a history of timely rent payments.
This initiative, along with a new child tax credit, other tax incentives, and the recent negotiation of Medicare prescription drug prices, forms a comprehensive economic agenda addressing the rising cost of living, a major concern for voters.
The campaign emphasizes “more generous support for first-generation homeowners,” highlighting the plan’s focus on making homeownership more accessible.
But Harris’ housing policy, the details of which are still to be confirmed, would not fix the underlying supply and demand issue, as well as stubbornly high interest rates, that have made the prospect of buying a home so unaffordable for so many, reports NewsWeek.
A source familiar with the plan to construct 3 million new housing units was reported to Reuters.
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Also Read: Donald Trump Now Plans To End Social Security Taxes For Retirees
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