Another major insurance company has decided to back out of providing policies in California a week after State Farm decided to no longer grant new policies to those living in the state, also refusing to provide policies for businesses and personal lines property.
Now, the organization says that they too will be refusing to provide insurance to those in the Golden State, following through on their plans from last year to end new policies for homeowners in the state.
Allstate Pulls Out of California
Allstate says that it will no longer be issuing new homeowner insurance policies in the State of California, although the company refers to their decision as a "pause" to their service in the state.
“We paused new homeowners, condo and commercial insurance policies in California last year so we can continue to protect current customers,” a company representative said, speaking to KTLA in Los Angeles. “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.”
State Steps in to Help with Insurance Payouts
With two major insurers now stepping out of the market, at least temporarily, the state has been forced to intervene in the issue, saying that it will now provide new insurance protections coming into effect this summer that increase payouts and evacuation benefits for those that suffered damage during wildfires after the action was approved by a judge.
According to the state, Allstate was the fourth-largest insurance provider in 2021.
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