Farmers to Write More Homeowners Insurance in California

Farmers Insurance says it will now write more new homeowners insurance policies in California. Due to serious loss issues, an inability to easily raise rates, the insurer is one of the many companies operating in California that suspended — or seriously reduced — writing new policies.

The company’s now limit of 9,500 new policies a month will be raised and Farmers is hoping to add as many as 300,000 new customers in wildfire prone and other distressed areas by early next year. To get the job done, Farmers says it is going to give local agents the tools needed to build the new business.

The move is said to be aligned with Insurance Commissioner Ricardo Lara’s Sustainable Insurance Strategy. It will impact Farmers Smart Plan Home, Smart Plan Condominium and Smart Plan Renters policies.

Farmers Personal Lines President Behram Dinshaw said the company is asking the department of insurance for a 6.99% average rate increase. It will also increase the bundling discount for Farmers’ customers to 22%. That’s up from the current 15% discount.

Dinshaw said the decision to lift the cap demonstrates Farmers’ commitment to California having a stable insurance market.

“By removing the cap on offering new homeowners policies, Farmers is doubling down on its commitment to California homeowners, expanding choice and availability for consumers across the state,” Dinshaw said. “We are also reaffirming our commitment to serving the needs of residents by submitting a new Sustainable Insurance Strategy-inspired rating plan which is designed to expand our offerings to more homeowners across California.”

California’s Consumer Watchdog president, Jamie Court said the Farmers decision is not what it seems.

“Farmers is able to raise rates for its highest risk policyholders by up to 65% in exchange for selling 59,000 less policies in the state than when Lara announced the deal,” Court said. “Hundreds of thousands of policyholders have been dumped and forced onto the FAIR plan over the last two years since Lara’s strategy was announced. These filings will not reverse that trend.”

Source link: Insurance Business America — https://bit.ly/4pKnkkr

Source link: PropertyCasualty360.com — https://bit.ly/4izx7aU