California homeowners who rely on Travelers Insurance will be paying a lot more money for their residential insurance needs.
According to a San Jose Mercury-News report, Travelers will be raising rates at an average of 15.3%, with some of the company’s 320,320 California customers receiving hikes of more than 25% on an annual basis. Travelers, which is the state’s sixth-largest home insurer, said the increases could go into effect as soon as June 24.
The rate hike is lower than the amount Travelers initially sought – the company aimed for an increase for homeowners’ rates by an average of 21.7%, but lowered that amount following an agreement with the nonprofit Consumer Watchdog.
On average, California homeowners pay $1,452 a year for home insurance coverage. It is unclear which parts of the state will be most impacted by the rate hikes. In a filing with the state insurance department, Travelers blamed “inflationary pressures” on construction costs and insisted the current pricing models do not account for the impact created for “changing climate conditions.”
“The approved adjustments to our California homeowners insurance rates are necessary to align pricing to the risks that our customers are facing,” the company said in a statement.
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