Amid the ongoing insurance crisis in California, Allstate said it would resume selling new policies in the Golden State should regulators adopt proposed regulatory changes to make it easier for insurers to raise rates.
“If the regulations were in effect today, we would begin selling new homeowner insurance policies tomorrow,” Gerald Zimmerman, senior vice president of government relations for Allstate, said in a public hearing, Bloomberg reported.
“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.”
Catastrophic models is a risk management tool used by insurance companies, businesses and regulators to assess the potential losses caused by a catastrophic event.
The company confirmed the news to KTLA in a statement.
“We’re working with the California Department of Insurance to improve insurance availability in the state. Once home insurance rates fully reflect the cost of providing protection to consumers, we’ll be able to offer home insurance policies to more Californians with timely rate approvals, the use of our advanced wildfire modeling and reinsurance costs.”
Allstate stopped issuing new insurance policies for all business and personal property in California back in 2022. Since then, companies like State Farm, Farmers Insurance and The Hartford have made similar business moves.
Companies have said they are cutting back on business in California due to the increasing severity of natural disasters, like wildfires, and state regulations limiting the cost of policies.
In 2021, California Insurance Commissioner Ricardo Lara announced new insurance protections in effect for the summer wildfire season, increasing payouts and evacuation benefits for wildfire survivors.
The new protections would mean “larger payouts for some claims and less red tape from insurance companies,” according to Lara.
In 2022, the commissioner also enforced the new insurance pricing regulation under the Safer from Wildfires framework, requiring insurance companies to provide discounts to consumers who follow safety measures such as upgraded roofs and windows to prevent wildfire risks.
Due to the swift withdrawal of insurance companies statewide, legislation has been introduced to help mitigate the ongoing problem, but no measure has been signed into law yet.