California Insurance Commissioner Dave Jones reached an agreement last month with Allstate Insurance Co. and Allstate Indemnity Insurance to reduce the carrier’s homeowner insurance rates statewide by an average of 12.6 percent.
The average annual decrease is roughly $230. The rate reduction is retroactive to Feb. 1.
Rate regulation in California applies to homeowners, auto, and other property/casualty insurance. Insurers must get approval from the insurance commissioner before they can raise or lower rates. The commissioner approves rates he believes are sufficient to cover claims costs, administrative expenses and a reasonable return for the insurance company.
The commissioner has the authority to reject what he feels are excessive rates. The amount of a decrease and whether a policyholder receives a decrease depends on factors that include the location of the insured property, and other risk characteristics and coverage features.
Jones also approved a new coverage option added by Allstate that enables policyholders to select a separate higher deductible for wildfire peril and a lower one for other risks, such as fire not related to wildfire, water damage or burglary. The separate deductible option allows consumers to further reduce their overall premium.
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