Farmers Insurance announced it would be the latest insurance company to limit its home insurance policies in California. The company is now limited to 7,000 new homeowners insurance policies per month for the entire state.
The announcement comes amid rising home insurance costs, an uncertain regulatory environment and a volatile natural environment. Farmers joins State Farm and Allstate as companies looking to limit their risk exposure.
“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,” a spokesperson for Farmers told ABC10 last week. “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.”
In May, State Farm announced it would no longer offer new homeowners insurance policies. Allstate stopped offering new home insurance in November 2022.
“While both State Farm and Allstate made a business decision to put a temporary pause on new homeowners policies in our state, current customers will not lose their insurance, and both State Farm and Allstate continue to write auto insurance,” California Deputy Insurance Commissioner Michael Soller told ABC10. “While the Department of Insurance cannot do anything about rising costs of repairs, materials, and rebuilding, we are not powerless.”
The decisions from State Farm and Allstate sent many people looking for new homeowners insurance policies flocking to Farmers. The decision from Farmers to cap the number of home insurance policies in California is expected to further raise the price.
“About two years ago, (my premium) doubled. I think it went from about three to six,” Oakland Hill homeowner Suki Dennis said, adding that she now pays close to $7,000 a year. “It’s a lot of money for somebody that’s never had a claim on anything.”
