SACRAMENTO, Feb. 16 (UPI) -- Allstate Corp., which stopped covering homeowners in hurricane-prone U.S. states, may stop writing policies in California too, a state official says.
"Their strategy is an exit strategy," said Lt. Gov. John Garamendi, who oversaw Allstate rates for the last four years as insurance commissioner. "They've said they want to get out of the homeowners business in a market that is competitive, healthy and profitable."
He told The Los Angeles Times such a move was "stupid."
Allstate spokesman Mike Siemienas said the company would not "speculate on what future actions we're going to take."
Citing California's potential for natural disasters, Allstate has requested a 12 percent rate increase at a time when most home insurers are cutting rates.
Allstate said it needed the rate increase to build its reserves to pay future claims arising from the wildfires and earthquakes.
"The costs of protecting against losses have gone up dramatically," Allstate spokesman Rich Halberg said. "They are costs that we believe should be reflected in rates."