It turns out that regulations from the California Department of Insurance, adopted last October, played a part in the decision of these two insurance giants to stop selling homeowners policies in the largest United States property insurance market.
In a statement released by his office, Lara said then, “Protecting Californians from deadly wildfires means everyone doing their part, including insurance companies by rewarding consumers for being safer from wildfires.” That was mid-October. The 180 days are now up, and two major insurance companies have said “no thank you” to selling new property insurance policies in California.
Allstate and State Farm did not cite the mandatory discounts as a reason for their decision to stop selling new property insurance policies in California. State Farm blamed “historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market.” A statement from Allstate said, “The cost to insure new home customers in California is far higher than the price they would pay for policies.