In response to the insurance crisis in California, Allstate has revealed its intention to resume selling new policies in the Golden State, contingent upon the adoption of proposed regulatory changes that make it easier for insurers to raise rates. The announcement was made by Gerald Zimmerman, Allstate's senior vice president of government relations, during a public hearing.

Zimmerman emphasized that if the regulatory changes were currently in effect, Allstate would commence selling new homeowner insurance policies immediately. He further stated that the incorporation of catastrophe modeling and the consideration of reinsurance costs into rates would enable the company to operate in nearly every part of California.

Catastrophe modeling is a prevalent risk management tool used by insurance companies, businesses, and regulators to evaluate potential losses resulting from catastrophic events. Allstate confirmed its plans to resume policies in California in collaboration with the California Department of Insurance.

Due to the increasing severity of natural disasters, particularly wildfires, and state regulations limiting policy costs, several insurance companies, including State Farm, Farmers Insurance, and The Hartford, have curtailed their operations in California. Allstate joined this trend by halting the issuance of new insurance policies for all business and personal property in the state in 2022.

In 2021, California Insurance Commissioner Ricardo Lara introduced new insurance protections to aid survivors of wildfires, which included increased payouts and evacuation benefits. The following year, Commissioner Lara enforced the Safer from Wildfires framework, requiring insurance companies to offer discounts to consumers who implemented safety measures such as upgrading roofs and windows.

Recognizing the swift withdrawal of insurance companies across the state, lawmakers have introduced legislation to alleviate the ongoing problem. However, no measures have been signed into law as of yet.

The potential resumption of Allstate's insurance policies in California signifies a potential turning point in the insurance crisis, as regulatory changes may provide insurers with the flexibility to adjust rates. While this development offers hope to Californians seeking comprehensive insurance coverage, the ultimate impact and effectiveness of the proposed changes remain to be seen.