ALLSTATE MAY NEED TO CHANGE ITS NAME AS IT QWIETLY BACKS AWAY FROM CALIFORNIA HOME INSURANCE
Be vewy, vewy qwiet. That worked really well for a particular huntin’ cartoon character. And hey, it’s timeless. But is seems that one of America’s largest insurance companies decided to take the same tack when it came to backing out of the market of home insurance for the state of California. You probably already heard about how State Farm announced it would stop new homeowner insurance applications this month. But Allstate (now, excepting California) evidently stopped accepting new insurance applications (in Cali) in last year’s 4th quarter. And they were vewy vewy qwiet about it, too.
ALLSTATE DIDN’T MAKE ANY ANNOUNCEMENT, UNLIKE STATE FARM (AND OTHERS, TOO?)
So why is this news now? The San Francisco Chronicle reviewed an Allstate rate increase the company send to the California Department of Insurance and saw the qwiet numbers there. So there was no announcement, no heads up, please don’t look at Allstate sideways as California’s 5th largest homeowner’s insurance provider removes themselves from consideration. It’s pwetty darn strange, that’s for sure. Well, beyond the fact that a major market like California is now too expensive to insurance companies to offer home insurance because of wildfires and mpore expensive repair costs.
WHAT ELSE IS AT PLAY IN CALIFORNIA, TO MAKE ALLSTATE AND OTHER INSURERS TO RUN AWAY?
I could put on my tinfoil hat and wonder out loud (well, with keyboard strikes) that maybe there’s some other market considerations afoot, as well. Like rumblings about the San Andreas doing the Macarena, or major changes to state law that may be in the pipeline that insurers don’t want to be on the hook for. Or, Gawd forbid, more regulations? Who knows. But the simple profit margin insurance companies like to maintain is probably enough to abandon California. And that’s what (should be formerly known as) Allstate and State Farm have done. Oh! And AIG, too! They’ve taken the first giant step in abandoning California.
And for existing policy holders there? Read that fine print nice and close, ye hear? And be vewy vewy qwiet.