Allstate confirms no new CA home insurance following State Farm’s announcement last week

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STATEWIDE – Allstate, the third largest home insurance provider, revealed on Friday, they stopped providing insurance to new California homeowners last year. This announcement comes after State Farm halted home insurance to new California homeowners effective May 27.

“We paused new homeowners, condo and commercial insurance policies in California last year so we can continue to protect current customers,” Allstate told CBS News. “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.” 

California Department of Insurance State Farm Consumer Alert

The California Department of Insurance (CDI) issued a consumer alert, May 30, following State Farm’s new policy announcement.

On Friday, May 26th, State Farm General Insurance Company announced it will temporarily stop writing new homeowners’ and certain commercial insurance policies in California. Announcements such as State Farm’s can create uncertainty and anxiety among consumers looking for homeowners insurance,” says the Consumer Alert found on the CDI website.

CDI says they cannot legally control a company’s business decision, but can help Californians navigate their options. 

According to the department, there are approximately 115 insurance companies continuing to write residential policies throughout the state — which includes the Wildland Urban Interface (WUI) – depending on the particular features of the home, the home’s wildfire risk score, and the community in which it resides. 

CDI says they have tools to help consumers shop for insurance, including Tips for Finding Residential Insurance and an Insurance Finder tool that can locate an agent. CDI staff can help consumers with insurance coverage or claim questions. Contact CDI’s consumer hotline at (800) 927-4357 or online chat at www.insurance.ca.gov.

RELATED: State Farm to stop insurance coverage for new California homeowners effective May 27

CA one-year moratorium on cancellation

In 2021, the California Department of Insurance issued a mandatory one-year moratorium on insurance companies canceling or non-renewing residential insurance policies in certain areas within or adjacent to a fire perimeter after a declared state of emergency is issued by the Governor.

“Losing your insurance should be the last thing on someone’s mind after surviving a devastating fire,” said CA Department of Insurance Commissioner Ricardo Lara in 2021. “This law gives millions of Californians breathing room and hits the pause button on insurance non-renewals while people recover.”

CDI says the FAIR Plan is an available insurance of last resort and is able to offer up to $3 million coverage for homeowners and, later this year, will offer up to $20 million commercial insurance coverage for businesses, homeowners associations, condominium complexes, and others.

To read CDI Consumer alert on State Farm’s decision visit https://www.insurance.ca.gov/0400-news/0102-alerts/2023/Consumer-Alert-on-State-Farm’s-Decision.cfm

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