Allstate Insurance has quietly stopped accepting new insurance applications from California homeowners.
The discovery comes one week after State Farm announced it would cease issuing new homeowners insurance policies.
Inside the move: The decision by Allstate was made last year, but it only recently came to light after State Farm, California’s largest property insurer, announced its move.
- The decision was made last year, but it only recently came to light after State Farm, California’s largest property insurer, announced a similar move last week.
- Allstate is the state’s fourth-largest property and casualty insurance provider, and a company representative confirmed that the decision to stop accepting new homeowner insurance claims is to “protect current customers.”
- The representative stated that the cost to insure new home customers in California is far higher than the price they would pay for policies due to wildfires, higher costs for repairing homes, and higher reinsurance premiums.
- Allstate did not specify how this decision would impact current home insurance customers or if they could renew their policies. The state does not require potential homeowners to have insurance, but many mortgage lenders may require some proof of insurance as a loan condition.
A domino effect: California Insurance Commissioner Ricardo Lara announced new insurance protections in effect for the summer wildfire season that increase payouts and evacuation benefits for wildfire survivors in 2021.
- The new protections would mean “larger payouts for some claims and less red tape from insurance companies,” according to Lara.