STATEWIDE – Farmers Insurance, the second largest home insurer in California, says starting this month, it will limit new applications for its Smart Plan Home program to 7,000 monthly.
“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,” Farmers said to the San Francisco Standard. “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.”
CA Department of Insurance Deputy Commissioner for Communications Michael Soller said Farmers limit is not new.
“The Department of Insurance understands Farmers has been writing 7,000 monthly new homeowners policies on average. So this is not a departure,” said Soller.
The news comes after State Farm and Allstate halted home insurance to new California homeowners earlier this year.
APCIA says California’s Insurance Marketplace is Fragile
The American Property Casualty Insurance Association (APCIA) released a statement in response to the latest large insurance carrier’s announcement on limiting new homeowners insurance writing in California.
“Insurers do not want to retrench from one of the nation’s most important markets, but cannot continue to operate and protect policyholders when insurers are struggling to secure an adequate rate and manage their risk exposure,” said APCIA president and CEO David A. Sampson.
Sampson calls for reforms to Prop 103, a law passed by California voters in November 1988, that requires the “prior approval” of California’s Department of Insurance before insurance companies can implement property and casualty insurance rates.
Department of Insurance Consumer Alert
The California Department of Insurance previously issued a consumer alert following State Farm’s policy announcement.
The department said they cannot legally control a company’s business decision, but can help Californians navigate their options.
According to them, there are approximately 115 insurance companies continuing to write residential policies throughout the state — which includes the Wildland Urban Interface (WUI) – depending on the particular features of the home, the home’s wildfire risk score, and the community in which it resides.
The department says they have tools to help consumers shop for insurance, including Tips for Finding Residential Insurance and an Insurance Finder tool that can locate an agent. Staff can help consumers with insurance coverage or claim questions. Contact the Department of Insurance’ consumer hotline at (800) 927-4357 or online chat at www.insurance.ca.gov.