"What sealed the deal was that its [chief executive officer] said they are going to price themselves out of the market, no matter what," Mr. Chaney said. "Allstate will not negotiate for a reasonable rate, period."

Actuaries in the Mississippi Insurance Department (MID) concluded the rate requested was not justified.

But company spokeswoman April Eaton said Allstate needs the rate increase to keep up with a rise in frequency of claims related to fires, burglaries, water damage and liability.

"We think the rate as submitted is justified," Ms. Eaton said. "We need to obtain the right rate for the risk to make responsible business decisions and protect our policyholders."

Ms. Eaton said she "doesn't exactly know" what the next step will be for Allstate in Mississippi, but the insurer will try and continue to work with the state insurance department to find solutions.

MID spokesman Joseph Ammerman said Allstate has 30 days to request an appeal.

Allstate had 12.6 percent of the homeowners multiperil market in Mississippi, third to State Farm (25 percent) and Southern Farm Bureau (15.8 percent), according to Highline Data (www.highlinedata.com), part of Summit Business Media, which owns National Underwriter.