SAN DIEGO — In a matter of months, most California homeowners insured through Allstate can expect a huge increase in their premiums.
The state's insurance commissioner has just approved a 34.1% rate increase. It's the most dramatic hike by a major insurer in California in the past three years.
This newly approved rate hike for Allstate customers is set to roll out in November, and will impact more than 350,000 policy holders across California.
"Consumers are mad, said Carmen Balber, executive director of Consumer Watchdog , based in Los Angeles. "They do not understand why their rates are going up so much."
Consumer Watchdog petitioned to intervene when Allstate originally requested a rate hike in July of last year.
"Allstate is the last major insurance company in California to raise rates to reflect the huge inflation and construction cost increases that all of the other insurance companies have already asked for," Balber told CBS 8.
She pointed out that Consumer Watchdog was successful in securing from Allstate a six-month moratorium on non-renewals, meaning that the company agreed not to drop any existing customers during that time.
While the average increase is about 34%, that doesn't meant that all customers will see the same change in their bill.
"What it means is there's a range," said Karl Susman, an insurance agency owner and industry expert who spoke earlier with CBS 8. "Some people are going to get a deduction, meaning that their premium is going to go down by up to 57 percent, all the way up to a plus, believe it or not, 647 percent."
In a statement, a spokesperson for Allstate said: "Higher home values and repair costs coupled with more frequent, severe weather lead to higher payments to help customers recover, so we need to adjust rates to better reflect the cost of protecting our customers."
"This will be a big blow to consumers' pocketbooks, but hopefully they wont have to see it again for some time," said Balber.
She is hopeful that these trends are changing, with inflation cooling and construction costs coming down.
"Things should calm down," she said.
But there's a red flag, she says.
California's insurance commissioner is currently considering new rules that would, among other things, allow insurers to consider climate change when setting their rates.
"Consumers can expect another round of huge double-digit rate increases in January if the insurance commissioner's plan goes forward as he wishes," Balber said.
While the state has approved Allstate's new rate hike, it is currently considering a request by State Farm to hike its rates by an additional 30%, after already getting a 20% increase approved just last year.
WATCH RELATED: Allstate looks to raise rates on homeowners insurance in California by 34.1% on average