Several major insurance firms, including Allstate, State Farm and USAA, have pulled out of California in recent years. (Credit: Diego M. Radzinschi/ALM)
Citing an improved marketplace in California, Farmers Insurance will re-open several coverage options in the state.
The phased reintroduction, which started December 14, includes condominium, renters, umbrella, landlord, vacant and manufactured home policies. Many of these coverage options had been paused for more than a year.
Farmers also announced it will increase the number of homeowners policies it will accept from new customers to 9,500 per month, up from its previous commitment of 7,000.
“Farmers Insurance has decided to take these steps to increase coverage availability for California consumers because we recognize that the state’s insurance marketplace has indeed improved,” said Behram Dinshaw, president of personal lines for Farmers, in a statement. “In addition, with the impending implementation of Commissioner Ricardo Lara’s Sustainable Insurance Strategy in the coming year, we want to be well-positioned to provide even more coverage options to residents in the state.”
The Sustainable Insurance Strategy, which takes effect Jan. 2, allows insurance providers to set policy rates based on catastrophe models that incorporate the growing risk of climate change, instead of just historical disaster data. In exchange, carriers must increase business in high-risk areas by as much as 85% of their statewide market share.
Several major insurance firms, including Allstate, State Farm and USAA, have pulled out of California in recent years due to an increase in wildfires and other climate events as well as a regulation that has made rate increases difficult.
Farmers’ reopened coverage options will be introduced using a phased approach from now until March 15.
These changes follow Farmers’ announcement earlier this year that, based on an improved commercial insurance market, it would resume accepting business insurance applications for auto service and repair, habitational, manufacturing, real estate and wholesale distribution. Last July, it lifted a temporary moratorium on new commercial automobile policies in California.
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