Allstate customers in California will see their home insurance premiums rise when their policies next come up for renewal, under a rate increase the state Department of Insurance approved in August.
The approval, for a 34% increase in Allstate’s home insurance rates, will affect 354,034 policies, according to documents the insurer filed with state regulators. Policyholders will begin to see increased rates with their next renewal notice.
With wildfire-related losses straining many California insurers’ profitability, Allstate is also launching more than a dozen discounts for homeowners who make home improvements and take actions that can reduce their wildfire risks.
Annual premium increase of over $5,000 for some
While the average approved rate increase is 34%, many policyholders will see larger increases, depending on where they live, Allstate’s filing documents show.
Residents of Valyermo (ZIP code 93563) with Deluxe and Select Value policies will see the largest annual dollar jump: $5,130, on average. Homeowners in Hornitos (ZIP code 95325) with the same type of policies face the highest average percentage increase, at 405%. Residents in ZIP code 95441 (Geyserville, Jimtown, Mercuryville, Nervo, and Las Lomas) will face the greatest dollar increase among Allstate customers with Deluxe Plus policies. They’ll see an average annual hike of $5,051.
Wildfire mitigation discounts available
Policyholders may be able to reduce their premium increases by taking advantage of the insurer’s new Wildfire Mitigation Discounts program. Allstate will offer community- and property-level discounts for property owners who take steps to mitigate wildfire risks, including:
Clearing under decks
Clearing vegetation from within 5 feet of structures
Using non-combustible building materials
Building or refurbishing with fire-resistant roofing materials and vents
The majority of the properties most affected by Allstate’s rate increase are in areas with high to severe fire risks.
What’s next?
Allstate’s rate-filing application requested an effective date of April 1, 2024, so affected homeowners will likely see increases the next time their home insurance policy comes up for renewal.
That said, California is far from the only state facing escalating home insurance costs. The national average annual cost of home insurance increased nearly 20% since 2021, Insurify data shows. Insurify’s data scientists predict a 6% national increase in 2024.
Some states, though, may face very steep increases, according to Insurify’s Insuring the American Homeowner report. Louisiana faces the highest potential increase: 23%. Illinois, North Carolina, South Carolina, Montana, Utah, Michigan, and Maine also face double-digit increases, ranging from 10% to 14%, Insurify predicts.
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