This step was taken on the heels of State Farm’s and Allstate’s exit from selling there.
Farmers Insurance has made a filing revealing that it is implementing restrictions on home insurance in California, further limiting the choices residents of the state have to protect their properties.
Insurers have been blaming increasing wildfire risk and rising costs of repairs and replacements.
Farmers is only the latest to change the way they do business in the Californian home insurance market. Allstate and State Farm both announced earlier this year that they will no longer be selling property coverage in the state. While they are both still covering existing customers, they are no longer selling to new customers.
These withdrawals and limitations from selling have made it increasingly difficult for property owners in many parts of California to be able to find the coverage they need. Farmers is the second largest provider in the state, and it has said that it is limiting new business on residential policies. This was revealed in a rate filing the company made with the state regulator.
Farmers is already declining to renew many home insurance policies due to issues such as the age of the properties.
This move has shown property owners that had been hopeful that other major insurers would step up where State Farm and Allstate have stepped away, that things might not be that easy. It appears that a growing number of insurers are seeing California as a decreasingly appealing opportunity for doing business.
According to a report in The Standard, a spokesperson from the insurer has also confirmed that several coverage programs have been “paused”, while it also intends to restrict its new business.
“With record-breaking inflation, severe weather events, and reconstruction costs continuing to climb, we are focused on serving our customers while effectively managing our business,” said the Farmers spokesperson. “Effective July 3, Farmers will limit new homeowners insurance policies in California to a level consistent with the volume we projected to write each month before recent market changes.”
Though Farmers described its intentions to reduce its home insurance underwriting in a Department of Insurance filing back in March, it is only now as other insurers have stopped selling altogether that people are starting to take notice.
