California Insurance Shake-Up: Allstate Ends New Home, Condo and Commercial Policies

Property and casualty insurance provider Allstate Corp ALL has quit selling new homes, condominiums, or commercial insurance policies in California.
Allstate became the latest insurance firm to stop offering coverage, citing worsening climate and higher building costs, the New York Times reports.
State Farm made a similar decision last week, citing rapidly growing catastrophe exposure. Allstate stopped accepting new policies in the state last year.
The cost to insure new home customers in California outweighed the price they would pay for policies due to wildfires, higher costs for repairing homes, and higher reinsurance premiums.
Most large insurance companies in Florida have pulled out of the state, with homeowners relying on smaller private companies.
Allstate limited the sale of new homeowner insurance policies in California in 1994 after the Northridge earthquake. It returned to the state, but it paused new homeowner insurance policies there again in 2007. Ten years later, it came back to the California market.
The combined moves by Allstate and State Farm in California may lead more property owners in the state to lean on the FAIR Plan.
The FAIR Plan needs insurance companies operating in California to cover losses proportional to their market share in the state.
Price Action: ALL shares traded higher by 0.12% at $110.21 on the last check Monday.