California allows Allstate to raise home insurance rates by 34%

The California Department of Insurance has given Allstate the green light to raise homeowners’ premiums by an average of 34% starting in November.

That’s the largest increase the state has seen in three years from any insurance provider, according to news reports. Policyholders will see it on their next renewal notice.

The hike will affect more than 350,000 policyholders, the San Francisco Chronicle reported.

The highest increases will be seen in Fresno, Madera and Mariposa counties, the Chronicle added.

Allstate is the fourth largest property and casualty insurance provider in California, the Department of Insurance said.

Why are insurance rates rising?

In a statement, Allstate said the hike is necessary because of higher home values, increased repair costs and the growing frequency of severe weather in California.

The state’s median home price is $904,210, the California Association of Realtors reported.

The risk of wildfires is among the factors in setting premiums, Allstate said at allstate.com . Fires are common during hot weather in California.

“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,” Allstate said.

Allstate told various news media that it will provide discounts to customers who work to reduce wildfire risk on their property.

State says California still has cheaper rates

Despite the Allstate hike, the state’s insurance rates remain lower than many other states, including large ones such as Florida or Texas, Mike Soller, the deputy insurance commissioner, said in a CBS News Los Angeles story.

But Soller added fires and winter storms have impacted rates.

Soller recommended homeowners contact the Department of Insurance if they have questions about their policy or want to know why their rates are increasing. The department can be reached at its consumer hotline, 800-927-4357, and at its headquarters in Los Angeles, Sacramento, and Oakland.

State Farm seeks increase

In addition to Allstate, State Farm is seeking the Department of Insurance's approval for a 30% rate increase for homeowners’ premiums, according to news reports.

Dave Mason covers East County for the Ventura County Star. He can be reached at dave.mason@vcstar.com or 805-437-0232.

This article originally appeared on Ventura County Star: California allows Allstate to raise home insurance rates by 34%