Allstate announced its no longer offering new home insurance policies in California due to high building costs and environmental concerns like wildfires.
Allstate also cited regulations and the impact of inflation in California for cutting new policy sales.
Company spokesperson Brittany Nash said that Allstate couldn't adjust prices when inflation hit due to California's Prop 103, which requires the"The cost to insure new customers and pay claims would be higher than the price they pay for policies," Nash said. California Gov. Gavin Newsom, left, and Nevada Gov. Steve Sisolak talk as they tour destroyed home by wildfires near where the Tamarack Fire ignited earlier in July in Gardnerville, Nev., Wednesday, July 28, 2021. "State Farm General Insurance Company made this decision due to historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market," the company said in a statement.
Insurance Commissioner Ricardo Lara responded to State Farm's decision by saying those factors were out of the California Department of Insurance agency's control. "The factors driving State Farm’s decision are beyond our control – climate change challenges, higher reinsurance costs affecting the entire insurance industry, and global inflation," LaraAllstate had previously stopped providing new homeowner policies in California from 2007 to 2016, the San Francisco Chronicle reported,"after state regulators questioned the company’s request for a 12.2% rate increase.
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