Huge losses from national disasters prompt industry to jack up prices and pull back from some markets; ‘worst possible scenario’ for consumers
After Allstate suffered billions of dollars in losses and failed to get the rate increases it wanted, it resorted to the nuclear option.
The insurance giant threatened last fall to stop renewing auto insurance for customers in three states that hadn’t given in to its demands, which would have left those policyholders scrambling for coverage. The states blinked.
In December, New Jersey approved auto rate increases for Allstate averaging 17%, and New York, a 15% hike. Regulators in California are allowing Allstate to boost auto rates by 30%, but still haven’t decided on its request for a 40% increase in home-insurance rates after the insurer refused to write new policies.
For many Americans, getting insurance for both their cars and homes has gone from a routine, generally manageable expense to a do-or-die ordeal that can strain household budgets.
Florida, of all states, created this. There are requirements to use it, but for many it is their only real option.
Does it actually cover anything? I haven’t looked into it but my knee-jerk reaction is that it’s very simple and doesn’t cover anything important, especially anything having to do with climate change.
Florida here. They have adequate coverage, but there are caps in some extra options or high-end tell estate. The bigger issue is that all the other instance agencies are pulling out of the state so Citizens (the state insurance) is having to cover more and more to the point that the state is just one direct hurricane hit away from insolvency.