Insurance Commissioner reaches agreement with Allstate to reduce homeowner insurance rates
News: 2016 Press Release
SACRAMENTO, Calif. — Insurance Commissioner Dave Jones today announced that he has reached an agreement with Allstate Insurance Company and Allstate Indemnity Insurance to reduce Allstate's homeowner insurance rates statewide by an average of 12.6 percent, effective February 1, 2016.
"Reducing Allstate's home insurance rates is a big help for families as incomes fail to keep pace with family expenses," said Insurance Commissioner Dave Jones. "Once again, Californians have benefited from the insurance commissioner's rate regulation authority for home insurance rates and the public intervenor process."
Rate regulation in California applies to homeowners, auto, and other property and casualty insurance. Insurers must get approval from the insurance commissioner before they can raise or lower rates. The insurance commissioner approves rates sufficient to cover claims costs, reasonable administrative expenses and a reasonable return for the insurance company. The Commissioner has the authority to reject excessive home insurance rates.
Consumers are entitled to "intervene" or participate in California's rate regulation administrative process. Consumer Watchdog, a consumer advocacy organization, intervened and participated in the negotiations led by the Department of Insurance with Allstate.
The amount of a decrease and whether a policyholder receives a decrease depends on a number of factors, including the location of the insured property, and other individual risk characteristics and coverage features. The average annual decrease is approximately $230. The rate reduction obtained by the Commissioner is retroactive to February 1st. Eligible homeowners whose policies already renewed on February 1 will receive refunds.
The commissioner also approved a new coverage option added by Allstate which allows policyholders to select a separate higher deductible for wildfire peril and a lower one for other risks, such as fire not related to wildfire, water damage or burglary. The separate deductible option allows consumers to further reduce their overall premium.
"Allstate should be recognized for giving homeowners more flexibility to decide whether to reduce their premium by opting for a higher deductible for wildfire peril," said Jones.
Since 2011, when Jones took office, the department has processed nearly 40,000 property and casualty insurance rate filings under Proposition 103, the voter enacted rate regulation law. The Commissioner reduced the overall amount of requested rate increases by $974 million and approved over $1.3 billion in rate reductions, totaling over $2.3 billion in savings to California consumers and businesses. This total includes approximately $803 million in rate reductions for personal auto coverage and $455 million in rate reductions for personal homeowners coverage.
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Rate reduction examples since 2011:
- QBE reduced lender-placed homeowner rates by 35 percent
- American Assurance Insurance Company reduced lender-placed homeowner rates by 30.5 percent
- American Modern Home reduced lender-placed homeowner rates by 21.3 percent
- Great American Assurance Company reduced lender-placed homeowner rates by 28 percent
- Pacific Specialty Insurance reduced homeowner rates by 21.5 percent
- Unitrin Direct Property & Causality reduced homeowner rates by 14 percent
- Standard Fire Insurance reduced homeowner rates by 6.4 percent
- Travelers Property & Casualty Insurance reduced homeowner rates by 6.2 percent
- Universal North America Insurance reduced homeowner rates by 3.8 percent
- California Casualty Indemnity reduced automobile rates by 21.7 percent
- USAA General Indemnity reduced automobile rates by 20 percent
- Twin City Fire Insurance reduced automobile rates by 13 percent
- Hartford Underwriters Insurance reduced automobile rates by 8.4 percent
- Progressive West Insurance reduced automobile rates by 6.5 percent
- State Farm General Insurance average homeowner rate reduction 8.5
- USAA homeowner and condominium owner rate reduction 16.8 percent
Copy of the signed stipulation.
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.4357. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.