Two major insurers in California plan on raising rates by double digits for single-family homes that could cause premiums to skyrocket.
The AAA-affiliated Interinsurance Exchange of the Automobile Club applied to raise rates for homeowners by 11.2%, while rates for condos and people renting a home would drop by 20.5% and 27% respectively, according to the San Francisco Chronicle citing new filings with the California Department of Insurance.
If approved, the impact would vary, with some seeing a decrease as much as 80% while others could go from paying around $1,650 a year to $13,100, the paper reported.
Travelers Insurance is looking to increase its rates by 6.9% for homeowners, and decrease rates by 17% for renters, 22.8% for condo owners and 19.6% for condo landlords, according to the outlet.
Only about a quarter of customers would see a rate decrease under Travelers proposal, while roughly 60% of homeowners would get slapped with a bigger bill.
The two insurance companies combined cover about 760,000 homes in the state.
“As a company founded in California more than a century ago, we believe helping to ensure insurance sustainability is the right thing to do for our members and for the future of our state,” Mike Mohamed, the Auto Club’s senior vice president of insurance operations, told the Chronicle in a statement.
Both insurers said they would expand the number of new policies it writes if their proposals are approved.
A handful of other insurance companies have also already filed and saw their rate increase proposals approved — including Mercury Insurance, USAA, Pacific Specialty Insurance Co., according to the outlet.
The hikes stem from the Sustainable Insurance Strategy reforms that changed the method insurers use to set premium rates.
