Allstate tells regulators it has stopped selling new home insurance policies in California. State Farm said it's no longer accepting new applications.
The company blames ‘increases in construction costs outpacing inflation, rapidly growing catastrophe exposure and a challenging reinsurance market.’
The average California homeowner’s annual insurance premium is $1,300, compared with more than $2,000 in other states with wildfire risk and $4,000 in hurricane-prone Florida, according to the Insurance Information Institute. “What we’re hearing is that now, when buyers present an offer on a property we’re not only asking them for pre-approval for a lender, we’re also asking them if they’ve spoken to their insurance agent if they’ll insure the property,” said Joske Thompson, a broker at Compass Inc. with 40 years’ experience in the area.
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