Allstate Stops Offering Home Policies to California Residents

Closing Bell

Allstate has ended offering new home insurance to buyers in California. The company said it's become too costly to insure new homes in the state susceptible to wildfires. Allstate is the fourth biggest property insurer or at least was in California State Farm, which is the country's biggest car and home insurer also recently stopped issuing new policies for homes, condos and commercial properties in the state. Well, in recent years, wildfires have burned down thousands of homes raising the prices for insurers that pay for homes to be rebuilt or repaired. Inflation and supply chain challenges have only driven up the cost of construction. These past few years last winter insurers had to pick up the cost for homes that were flooded during California's most destructive storms in decades. So you had those plus the wildfires on the other end and it has been rough these past few years. Allstate disclosed in an earnings report in November that it had stopped insuring new homes in California, but the news really kind of started circulating on a broader scale just within the past 24 hours. So existing policy holders don't worry you won't be affected, but the moves do hurt California's efforts to attract new residents as people leave the state for places like Las Vegas and Austin, Texas all state stock up fractionally today.