California E&S Insurance

A $44,000 bill shows the dysfunction in California’s home-insurance market The roots of California’s insurance crisis go back years. The state’s tough rate caps kept premiums low. But home insurers eventually balked, saying they couldn’t charge enough to cover rising wildfire and other losses, made worse by climate change and development. Insurers didn’t renew tens of thousands of policies, especially in fire-prone areas. California’s uphill battle to draw insurers back could prove a template—or cautionary tale—for other disaster-prone states. New rules implemented last year, for instance, require home-insurers in the state to pledge to sell new policies in high-risk wildfire zones, in return for allowing them to charge higher rates. Others continue to shun the state despite winning big concessions. California regulators approved a 34% rate increase for Allstate in 2024. Yet it has no “growth aspirations” in California home insurance, Chief Executive Tom Wilson said last year, adding that it would take time to fix the market. A spokesman said that remains Allstate’s position.

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