State Farm and Allstate Are Coming Back to California. Should You Shop Your Home Insurance Again?
If you own a home in California, you probably haven't thought about homeowners insurance as something you could casually shop around for in a while. For a lot of homeowners, the goal has simply been: don't get canceled.
That may finally be starting to change.
California Insurance Commissioner Ricardo Lara announced that State Farm and Allstate have both filed plans to begin writing new homeowners insurance policies in California again. That's significant because State Farm stopped accepting new homeowners insurance applications in California in 2023, while Allstate stopped writing new policies in 2022.
Before everybody starts calling State Farm tomorrow morning, there's an important distinction: they aren't fully back yet.
The companies have filed plans to reenter the California market under the state's Sustainable Insurance Strategy. According to the California Department of Insurance, 12 insurance groups have now either filed or received approval to expand residential coverage in the state. That's encouraging, but a filing is the beginning of the process, not a guarantee that your house is suddenly insurable by every major carrier again.
Still, I think this is important news for California homeowners, and not just because nobody enjoys paying an insurance bill.
Why This Matters Even If You Aren't Moving
One of the strangest things about owning a home in California over the last few years is that homeowners insurance stopped behaving like a normal competitive product. Many homeowners who might otherwise shop their insurance every few years have been reluctant to touch their existing policy because finding replacement coverage could be difficult or considerably more expensive.
If more major carriers actually begin writing policies again, we could eventually have something homeowners desperately need: more choices.
That doesn't mean I would cancel the policy you have today and start shopping recklessly. Quite the opposite. If you're considering changing insurers, I would first make absolutely certain that you have replacement coverage approved, understand exactly what it covers, compare deductibles and exclusions, and know what the premium will actually be before giving up your existing policy.
But if competition continues to return to the market, homeowners who have felt essentially trapped with their current insurer may finally have more room to evaluate their options.
Insurance Has Become Part of the Real Estate Conversation
This also matters enormously if you're buying or selling a home.
Years ago, insurance was something buyers typically handled somewhere in the background during escrow. Today, especially in parts of California with greater wildfire exposure, I want buyers thinking about insurance much earlier.
You can love the house. You can negotiate the price. You can qualify for the mortgage. But if you're financing the purchase, your lender is generally going to require acceptable homeowners insurance before closing.
That's why I don't want my buyers waiting until the last few days of escrow to find out what insuring a particular property is going to cost or whether conventional coverage is readily available.
And sellers should care about this too. If buyers have difficulty obtaining affordable insurance on your property, that's not merely the buyer's problem. It can become an obstacle to selling the house.
More insurers returning to California could eventually make transactions easier by giving buyers more options. But we're not there yet, and the availability and cost of coverage can still vary dramatically depending on the property.
Does This Mean California's Insurance Crisis Is Over?
No.
I wouldn't read this announcement and conclude that California homeowners insurance is suddenly back to normal. The Department of Insurance itself has been careful about that distinction. State Farm and Allstate have filed plans to resume writing new policies, and those filings still have to move through the regulatory process.
But I do think this is a meaningful signal.
For years, the story has largely been about insurance companies restricting new business or leaving parts of the California market. Having major insurers now taking steps in the opposite direction is worth paying attention to.
If you own a home, I wouldn't make a change solely because of this announcement. I would keep the policy you have, understand your current coverage and watch what happens as more carriers potentially reenter the market.
If you're thinking about buying, I would make insurance part of your due diligence earlier than you might have five or ten years ago. Get actual quotes for the property you're considering rather than assuming the insurance cost will look like the policy on your current house or your friend's house down the street.
And if you're thinking about selling, understanding how insurable your property is has become one more piece of preparing the house for the market.
For California homeowners, having more insurance companies willing to compete for our business would be very good news.
We're not there yet.
But for the first time in a while, it looks like we may actually be moving in that direction.
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Kristin Gutierrez
Helping Homeowners Turn What You Have Into What You Want.
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Sources
The California Department of Insurance announced the State Farm and Allstate filings and says 12 insurance groups have filed or received approval to expand residential coverage under its Sustainable Insurance Strategy.
