You’re not in good hands.
Allstate, the insurance company marketed by the beautifully deep-voiced Dennis Haysbert, says it will no longer issue new home insurance policies in California because of incessant wildfires.
Burning Down the House
In 2022 alone, there were nearly 7,500 wildfires in California that burned more than 362,000 acres, according to the state Department of Forestry and Fire Protection. And the fires are not limited to one region of the Golden State either, occurring as far north as Klamath National Forest and as far South as San Diego.
Roughly 875 buildings were harmed or destroyed by the fires. And that’s just too much for Allstate:
- Allstate actually made the move last year, but it wasn’t widely reported until recently. Current policyholders are safe, but the group is no longer taking on clients. “The cost to insure new home customers in California is far higher than the price they would pay for policies due to wildfires, higher costs for repairing homes, and higher reinsurance premiums,” the company told The Wall Street Journal.
- They’re not alone in their California retreat, either. State Farm also announced it would stop issuing new policies. The similarly named but separate Farmers — the second-largest property insurer in California — hasn’t pulled back entirely but did say it will limit new policies.
Packing Up and Moving Out: The insurance exodus is creating quite a debacle for the already-tumultuous California housing market. If prospective homebuyers can’t get insurance, they’ll likely not want to move there. For the past three years, the state has been losing residents as buyers look for cheaper housing in places like Texas, Nevada, Oregon, and Idaho. Between July 2021 and July 2022, the net movement out of California was a record 407,000 people, The New York Times reported. As the LA punk band The Garden sings, California here we go.