When it comes to homeowners insurance, California is in trouble. Yes, Insurance Commissioner Ricardo Lara and his department of insurance say there are still 115 insurers operating in the state. However, the biggest, and most important, and affordable, insurers are either leaving California, suspending service, or — like Farmers — holding the number of policies they’ll write to what they’re currently writing.
Farmers made that announcement late last week.
While it’s restricting service in California, it’s completely deleting homeowners, auto and umbrella insurance in Florida. That’s 30% of the company’s business in the Sunshine State. The reasons basically boil down to there are too many disasters that are too expensive to insure.
So the new limit for Farmers agents in California is 7,000 homeowners policies a month. And in a state the size of California, that’s not all that many. Plus, those retaining homeowners policies will see higher rates and higher deductibles.
Farmers — like State Farm, Allstate and AIG — is struggling with what it calls “record-breaking” inflation, higher construction costs and too many disasters.
By the way, a big part of the reason Farmers is now limiting policies, and why State Farm, Allstate and AIG left the state is because of an outdated regulatory system; one that does not let an insurer easily raise its rates.
State Farm, Allstate and Farmers are three of the top-5 insurers serving the state of California.
Source link: Insurance Business America — https://bit.ly/43x1TI4
