The rate hike would affect more than 350,000 policyholders.
Cathedral City firefighter Russ Barsness puts water on a structure at the Meadowood Napa Valley resort during the Glass Fire in St. Helena, Calif., on Monday, Sept. 28, 2020. The Glass Fire destroyed 308 homes and 343 commercial buildings. In yet another sign of instability across California’s home insurance market, Allstate is seeking to raise policyholders’ premiums by an average of 34%.
“Consumers have been hard hit by the massive rate increases insurance companies have imposed recently, and Allstate customers would be in the same situation,” said Carmen Balber, executive director of Consumer Watchdog, a consumer advocacy group that has challenged the rate hike. Allstate last raised rates by 4% in September.
In a statement, Allstate said the overall increase is necessary to cover higher insurance payouts due to more frequent and severe weather events, growing repair costs amid inflation and “legal system abuse.” The company did not provide details on the specific legal issues. On average, California homeowners pay $1,453 a year for the most common type of coverage, according to Bankrate.com, a personal finance website. Allstate’s requested rate increase would boost premiums by hundreds — and in some cases, thousands — of dollars, depending on the specific rate hike and the price of a homeowner’s current coverage.
It’s not yet clear when the new rates could be approved. That’s in part because Consumer Watchdog has filed an appeal of the proposed increase, asking for information on why Allstate believes the rate hikes are warranted.
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