New rule will allow some California home insurance rates to increase. Here's why

Many Californians are dealing with home insurance price hikes and cancellations because of wildfire risk.

More than 350,000 Allstate home insurance policyholders will see a big increase in cost . The California Department of Insurance is allowing the company to raise rates an average of 34%.

"Under Prop 103, which is the consumer protection law passed more than 30 years ago by voters, insurance companies are free to choose where they write policies, and they can choose their rates," Department of Insurance spokesperson Michael Soller said. "They can file for rates at any level with no requirement that they write more policies."

Related story: Californians finding it hard to keep their homes insured amid skyrocketing rates, canceled policies

Mark Slater is feeling the insurance crisis. After 20 years with Allstate - and without a claim - he received a letter saying his home insurance is not being renewed.

"I've paid my fair share into the insurance company," Slater said. "Now, they're just throwing me, kicking me to the curb -- and you know, saying, 'see you later.'"

Slater lives in a neighborhood in Santa Clarita with a hill in the back. It's now considered a high-risk fire zone. He called seven different companies to get a quote.

"Of the seven, six of them said, 'We're no longer servicing in California in your area,'" Slater said. "The seventh one, it was seven times the amount I'm currently paying that they quoted me."

The Department of Insurance is implementing new regulations that will allow some rate increases in exchange for companies writing new policies across the state. It is also working with Cal Fire to reduce the risk of wildfires.

"We need insurance companies writing in all parts of the state, and that's really, you know, the way we're going to drive down costs in the long term and we're going to make people safer," Soller said. "We're going to get insurance companies back writing policies."

The Department of Insurance said the new regulations will be implemented by the end of the year, and with more companies writing policies it should bring a more stable marketplace.

Current Allstate policyholders can expect an increase in their bills at their first renewal date after Nov. 7.