CA: No Longer in Good Hands
In California, Allstate Insurance is the third-largest home insurer. However, because of a combination of high housing costs and frequent natural disasters, Allstate has decided it doesn’t want to write new homeowner policies in the state any longer. Allstate has already taken similar steps in other states classified as “catastrophe-proned” like Florida, New Jersey and parts of New York.
While Allstate says its position is based on analyzing years of data and that the risk levels are just too high, consumer groups are claiming that its a bullying tactic to get the state to approve a 12% rate hike during a time when its competitors are dropping rates. Consumer groups point out less than 40-cents of every premium dollar has gone to paying claims recently and that Allstate’s profits have continued to rise every quarter. In 2006, Allstate Insurance made over $5 Billion in profits.