I think the below article will help everyone to understand why we are not writing new business here in California.  It was a HUGE decision for us to do this, but we felt it was best for our customers. We hope to be back in California if the insurance commissioner does not make it impossible to do business here, which is what is happening as we speak.

By George Ruebenson, president of Allstate Protection

The Ancient Romans had a tradition: Whenever they constructed an arch, the engineer assumed accountability for his work in the most profound way possible - by standing under the arch as the capstone was hoisted into place.

At Allstate, we don't build coliseums, we insure the homes and vehicles of 1.5 million households in California and 17 million customers across the country. But our agents and employees take their responsibility just as seriously. We hold ourselves to a standard of performance that says simply and clearly that we want our company to remain in a strong position to help protect those customers.

Allstate recently announced that we will no longer write new homeowner and landlord package policies in California, though we will continue to cover our current customers and this decision will not affect the renewal of their policies.

Indeed, Allstate is taking this action because of how many Californians we already insure. We are making sure that we have the financial strength to serve our customers in California and across the country if a major natural disaster occurs. A movie theater shouldn't sell more tickets than seats; a hotel shouldn't overbook its rooms. We are carefully managing how many homeowner policies we acquire in catastrophe-prone areas around the country, including California, so we can meet our customers' needs in the years ahead. That's prudent, that's responsible, that's accountability.

Across the country, more homes are being built in hazard-prone areas such as coastal and woodland tracts, and the cost to rebuild homes has increased dramatically. Meanwhile, changing climate patterns may be fueling storms and fires; indeed, many Southern California fire agencies now face year-round fire conditions.

It is shortsighted to look at one year of profits - as our critics have - and say our actions are unnecessary. It was just two years ago that our company incurred more than $5 billion in catastrophe-related costs as we helped our customers rebuild their lives after hurricanes Katrina and Rita and other disasters.

More than 1,200 Allstate agency owners and 2,400 Allstate employees call California home, and they are committed to the state. We've developed a program for new customers in California to find homeowner policies with companies not affiliated with Allstate while still working with our agencies for other insurance products. As market conditions change, we will reassess our situation to determine if we can offer new polices in this market in the future.

Beyond this commitment to Californians, our agents and employees across the state are, as always, available to answer questions. If and when a disaster strikes, they will be on the front line, going the extra mile in a time of need.

There undoubtedly will be some voices out there attacking the prudent steps we are taking. We can only imagine what those voices would be saying if California suffered a major wildfire at the same time a hurricane struck the Atlantic coast and insurers weren't financially strong enough to help protect their customers. Our first responsibility has to be to our existing homeowner policy customers - including 900,000 of them in California.

Our decision to not write any new homeowner insurance in this state was not taken lightly or cavalierly. And we hope that Californians understand our actions in light of our shared future in the state. It was done as part of a larger effort to ensure a healthy company. It's our responsibility to prepare for the inevitable challenges that lie ahead.

Our business is about helping put lives back together and getting families back on their feet. We're taking steps now to ensure that we are in a strong position to help protect customers in California and across the country. In short, we're holding ourselves accountable.

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"Other companies - such as Farmers, Safeco, State Farm, AAA, Hartford and others - have reduced insurance rates for California customers by more than $1 Billion, in direct contradiction to Allstate's actions."

It is to sad that political agenda has to get involved when people are trying to protect their assets.  Many companies did take a rate decrease this year, however at the same time these same companies are involved in a committee along with Allstate to help get mortgage companies, and other industries that would be affected with a major catastrophe here in California to help create a fund to help protect the interests in the event of a major loss. 

When a company takes a rate decrease it is not always in the favor of the customer.  Often times it is to become more price competitive for new business, or because of pressure from the insurance commissioner.  History shows that this is not always the best option as 21st Century went insolvent after the Northridge earthquake, and is now not allowed to do business for homeowners insurance in the state of California. If we were to have an event of that size here in LA/Orange counties there would be many more companies going insolvent.  My personal opinion is that State Farm and Allstate are the only two that would really come out standing, and then after we had to pay all the other claims from the companies that went insolvent we would not be financially stable either. 

Allstate is being the responsible one in this situation by weighing the risks.  We not only want to be able to pay out all the claims, but we also want to be a stable company after doing so.  We also have spent 100 million dollars on reinsurance to guarantee our stability.  These are the benefits that you do not see on the declarations page of your insurance policy.  There IS a difference between the quality of insurance companies.