Allstate increases California home insurance rates by 34 percent

( KRON ) — Homeowners in California insured by Allstate are facing a rate increase. Allstate was recently approved for an insurance rate hike by the California Department of Insurance, the insurance company said in a statement to KRON4.

The rate hike is set to be an average of 34.1% for more than 350,000 homeowners across California. Allstate is the state’s fourth-largest insurer, according to the CA Department of Insurance.

Allstate provided a reason behind the insurance rate hike, which adds to the already-high cost of living for California homeowners. The insurance company said in an email statement to KRON4 that higher home values in the state contribute to more expensive repair costs — thus resulting in higher premiums.

This home insurance rate approval allows us to continue protecting our existing customers as we work with the California Department of Insurance to improve coverage availability and create a more viable and sustainable homeowners insurance market for consumers in the state. Higher home values and repair costs coupled with more frequent, severe weather lead to higher payments to help customers recover, so we need to adjust rates to better reflect the cost of protecting our customers.

Allstate

Allstate said it is offering discounts to existing customers who have “taken action to mitigate wildfire risk on their property.”

The median home price in California is $904,210, according to the California Association of Realtors . It is the first time that the median home price in the Golden State exceeded the $900,000 threshold.

For context, that’s more than double the national average. According to Redfin , the median home price in the United States is $433,558 — also the highest on record.

The increased rates come at a time when Allstate rival State Farm canceled thousands of policies for homeowners in California over the summer. Roughly 72,000 State Farm insurance customers were affected.

State Farm, California’s largest insurer, cited soaring home costs and the increasing risk of natural disasters as reasons it won’t renew the policies of thousands of homes.

KTLA’s Iman Palm contributed to this report.

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