US insurer Allstate will no longer write new homeowner, condominium and commercial insurance policies in California, according to the San Francisco Chronicle and other local media outlets. 

The decision comes after State Farm General Insurance Company stopped accepting insurance applications from California’s homeowners due to growing risk from wildfire and other catastrophes and the rising cost of rebuilding. AIG has also limited the cover it offers in California.  

Allstate, which posted a large loss on catastrophe costs in the first quarter, paused new policies to ensure it “can continue to protect current customers,” spokesperson Brittany Nash wrote in an email, according to the newspaper. 

"The cost to insure new home customers in California is far higher than the price they would pay for policies due to wildfires, higher costs for repairing homes, and higher reinsurance premiums," Ms Nash said, adding that while the cost of rebuilding has increased Allstate’s pricing was limited by state regulation. 

Allstate, which began its pause last year, lodged a rate increase request to the California Department of Insurance. There are still more than 100 insurers doing business in California 

The withdrawals come after a series of destructive fire seasons, including 2018’s Camp Fire which destroyed 11,000 homes in the state and triggered huge insured losses, a jump in premiums and tougher underwriter requirements.  

It was the costliest single natural disaster in the world for insurers that year, Munich Re said, resulting in $12.5 billion ($19.17 billion) in covered losses. 

After that fire, California ruled insurers could not cancel or refuse to renew residential property policies due to wildfire risk for a year and must offer to reinstate or renew policies in place in nominated postal codes. 

The mandatory one-year moratorium covered more than 800,000 policies.