Allstate may leave California Homeowners

At any given time, lenders and insurance companies are in and out of the market. In other words, they are either looking for new business by offering completive rates and programs or they are cutting back on their existing business and raising their rates and or premiums. There are a number of reasons for this practice. In business expansion isn’t always profitable. It cost money to attract a new client and put a new loan on the books.

Allstate Insurance Company announced last week that it may cease issuing homeowner’s insurance in California as early as April, citing the potential for huge financial loss in the event of an earthquake. Allstate has already stopped writing new policies in the Gulf States and along the Eastern seaboard in response to recent hurricane damage.
Folsom based, Central Pacific Mortgage, closed their doors last week due to their contingent liability on a few non-performing loans. It was not a surprise to us industry insiders that Central Pacific was having some problems. Their interest rates and programs were less attractive than other lenders.
Mortgage and Insurance brokers usually know which companies are looking for new business and which ones are not. That’s another benefit of using a broker.