Allstate halting home insurance policies in California due to wildfire risk

ABC 7 ^ | 06/04/2023 | Michael Finney

[SeekAndFind]

ABC7 previously reported how State Farm Insurance stopped selling new homeowner policies in California last Saturday -- now a second major carrier, Allstate Insurance, confirmed today it ended new home policies in the state last year. On top of that, sources tell ABC7 a third carrier, Farmers Insurance, is limiting policies for new customers. The exodus comes as wildfire season looms ahead.

It's hard not to worry. But all three companies say they are still serving existing customers, and there are more than 100 other insurance companies still issuing new homeowner policies. However, after relentless wildfires of the past several years, homeowners in those hot spots will have an even tougher time getting coverage.

The threat of wildfires has grown every year, ripping through forests, scarring hillsides and destroying whole communities.

And amid the devastation, thousands of homeowners in disaster zones lost their coverage over the years.

Then last week, State Farm Insurance, California's largest carrier, stopped issuing all new homeowner policies in the state -- at least temporarily. The company cited a growing threat of natural disasters, as well as rising construction costs and inflation.

And Allstate Insurance, the fourth largest carrier in California, just confirmed it stopped issuing new homeowner policies last year. Allstate also blamed wildfires and higher costs, saying, "The cost to insure new home customers in California is far higher than the price they would pay for policies."

[dfwgator]

The war on home ownership is in full swing.

[SeekAndFind]

The San Francisco Chronicle reports.

Allstate, the fourth largest casualty insurance provider in the state in 2021, said the pause on new policies was "so we can continue to protect current customers," according to spokeswoman Brittany Nash in an email to the outlet.

"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," she wrote in a follow-up email on Friday.

The cost of rebuilding has increased with inflation, but Allstate can't adjust prices quickly due to state regulation, Nash wrote.

The pause began last year but appeared to receive only a passing mention in industry publications. The Chronicle learned of the development this week, after reviewing an Allstate rate increase request to the California Department of Insurance. -SF Chronicle

The move follows a similar measure by State Farm - the largest property and casualty issuer in the state - which announced in late May that it would stop issuing new homeowner policies, citing inflation, wildfires and rising reinsurance costs.

The Chronicle suggests that the decision by both companies suggests there may be insurance industry woes in the state that are more severe than the public is aware of.

[nickcarraway]

Based on people I know, it’s almost impossible to get home insurance in CA. And you have to waive earthquake insurance. I can’t believe it makes sense, actuarially.

[BobL]

Cute to blame it on Wildfires (code words for Global Warming), but 99% (or so) of homes in California are in cities and towns which are not at any risk of wildfires, yet these policy-writing shutdowns are state-wide.

...so what is the REAL story here?

[Worldtraveler once upon a time]

--- "the real story...."

Insurers like retailers leaving inner cities are identifying real risks, like Democrat-led inner cities, home building next to dried kindling yet permitted by governments looking for more property taxes, and environmentalists standing in the way of clearing kindling because "Gaia" and trial lawyers....

[aquila48]

State Farm too!

[Hambone 1934]

Crash the housing market...Who can sell their homes without insurance?????

[frank ballenger]

Not about home insurance but Yogi once said it you don’t have insurance that’s why you need it and getting cash is just as good as money.
https://www.youtube.com/watch?v=VS83HdpzxDU

Have to spend a few minutes comparing rates, though.

https://www.youtube.com/watch?v=FJXikqJrM30

[SpaceBar]

The war on home ownership...

Not even. California's urban areas are overgrown tinder boxes and their forests are mismanaged same. And when it goes up in flames everyone expects 'the insurance companies' to pick up the tab, unaware or unconcerned that insurance companies rely on statistical models to make a profit and survive. It ain't a war on home ownership, not by a longshot. It's a war on the insurance companies waged by Kleptofornia and the insurance companies are saying 'enough is enough'.

[frank ballenger]

Every hurricane and flood aftermath story about New Orleans or others has a couple telling reporter “And we lost everything we had. Everything. The house is gone now.”

Must have had a lot of houses uninsured for what really goes wrong.

[DAC21]

"Based on people I know, it’s almost impossible to get home insurance in CA. And you have to waive earthquake insurance. I can’t believe it makes sense, actuarially"

Must be based on Zip code. No problem getting Homeowners, Earthquake and Car ins in Chino CA, So Cal. Just having to pay 40% more than a year ago for Home Owners and Car Ins., 20% for earthquake.

Gave up Car Ins from Wawanese whom I had for 39 years. I think they want out of California based on the renewal quote they sent me a couple weeks ago. They probably saved myself and the Wife $25,000 over those years vs the competition, ahhh the good old days.

FJB

[ProtectOurFreedom]

The state acquiesced to the Greeniacs who prevented forest health maintenance. Electing a one-party state has consequences. But will the people being denied insurance connect the dots?

[ProtectOurFreedom]

I doubt 99% of homes are not subject to wildfires. Even urban areas have heavy forests often of resinous wood that can go up. The huge fire on the San Francisco Peninsula down to Big Basin State Park three years ago had the potential to drop burning embers on the many homes on the Peninsula. The Oakland Hills fire in 1991 demonstrated what can happen when the urban / suburban forest goes up. I’d guess one-third of homes in CA are subject to such fires.

I’m really surprised that big, disastrous fires have not happened on the San Fran Peninsula where the forests and chaparral are dense and not far from lots of houses.

[dragnet2]

State Farm just dumped CA too.

[thecodont]

Is it just homes they’ll no longer write new policies for, or is it new businesses also?

[dragnet2]

ABC7 previously reported how State Farm Insurance stopped selling new homeowner policies in California last Saturday

And that coincides nearly exactly when we dumped AAA and transferred everything over to State Farm, saving us nearly 2k per year. No joke.

[dfwgator]

Businesses might as well just cut a check to the DNC, if they want insurance.

[eyeamok]

Maybe it wasn’t such a good idea to give left wing extremists the Authority to dictate how much Insurance companies have to pay out, or how much they can charge in premiums...

[Bernard]

So a for-profit company wants to make a profit in order to do business in an area. Maybe California can stock up on unsold Bud Light and use that to pour on fires. Just a question of how to pop open enough cans at the same time to make a difference.