Allstate to raise California homeowners insurance rates by 34%
(KRON) — California homeowners insured by Allstate are facing a premium increase. Allstate was recently approved by the California Department of Insurance to increase premiums, the company said in a statement to KRON 4.
Insurance premiums for more than 350,000 homeowners across California, where Allstate is the fourth-largest insurer, according to the California Department of Insurance, are set to increase by an average of 34.1%.
Allstate explained the reasons for the premium increases, which will add to the already high cost of living for California homeowners. In an emailed statement to KRON 4, the company said rising home prices in the state are leading to higher repair costs, which in turn will drive up insurance premiums.
Approving these homeowners insurance rates allows us to continue protecting our existing customers while working with the California Department of Insurance to expand coverage and build a more realistic and sustainable homeowners insurance market for California consumers. As rising home prices and repair costs, as well as frequent and severe weather events, increase the amount we pay to help our customers recover, we need to adjust our rates to better reflect the cost of protecting you.
Allstate
Allstate said it would offer discounts to existing customers who “take steps to reduce wildfire risk on their properties.”
According to the California Association of Realtors, the median home price in California is $904,210. This is the first time that the median home price in California has surpassed the $900,000 mark.
For comparison, that's more than double the national average. The median home price in the U.S. is $433,558, according to Redfin, which is also the highest it's ever been.
The premium hikes come at the same time that Allstate's rival State Farm canceled thousands of California homeowners policies over the summer, affecting about 72,000 State Farm insurance customers.
California's largest insurer, State Farm, cited rising home prices and the growing risk of natural disasters as reasons for not renewing insurance on thousands of homes.
KTLA's Iman Palm contributed to this report.
