Allstate Insurance has filed plans with the Californian Department of Insurance (CDI) to increase catastrophe rates for policyholders in the state.

The insurer says there have been a number of reasons why rates have to increase by an average of 12.2 percent and having filed the plan now have to wait for CDI approval.

Allstate says its exposure to natural catastrophes such as earthquake or fire has increased significantly and it now needs to recoup a further $96 million a year in premiums.

It said the new models had identified a significant increase in the potential exposure and cost should large urban areas be affected by catastrophe and should a major earthquake hit the state and one of its population centres the Allstate liability has been estimated at in excess of $800 million.

The premium hike is by no means certain as the CDI has yet to give any indication that it will approve the plan.