Several property insurers in California cut coverage or stopped offering new homeowners policies in the past few years, as companies tried to limit losses amid the risk of paying enormous claims due to wildfires.
That left Golden State homeowners scrambling to find insurance at a time when they faced the likely prospect of losing everything should a particularly bad blaze, such as the ones currently burning through Southern California at the moment, come along.
Newsweek contacted insurers Travelers, Tokio Marine America, Nationwide, Farmers, USAA, Allstate, and Chubb for comment by email on Thursday morning, outside of standard working hours.
Why It Matters
While California has always been vulnerable to devastating wildfires, they have become more frequent and severe in recent years as global temperatures have increased. People living in areas that traditionally wouldn't have seen fires, such as Southern California, are now seeing their communities go up in flames.
What To Know
According to the California Department of Insurance (CDI), seven out of 12 of the Golden State's top insurers—the ones with the biggest market share—cut coverage in the state over the past four years.
As a result, California's FAIR Plan, which offers fire insurance to those who can't find it in the traditional market, "is becoming the insurer of first resort, not last resort, for many," the department wrote. Currently, the FAIR Plan has a 3 percent market share in the state.
What Companies Have Cut Coverage In California Since 2022?
Here's a list of insurers who have canceled or cut their coverage in the past four years.
State Farm
State Farm, which has the biggest market share in the state, announced in 2023 that it was stopping the acceptance of new homeowners insurance applications in California due to increased costs. The announcement came as the company implemented a 20 percent increase in premiums for existing customers.
In April 2024, State Farm announced that it would cancel 72,000 policies in the state by the summer, including 30,000 home policies and 42,000 commercial apartment policies. Of these, 1,600 were insured homes in Pacific Palisades, the affluent neighborhood struck by the Palisades fire.
In a statement to Newsweek, a spokesperson for State Farm said Wednesday: "Our number one priority right now is the safety of our customers, agents and employees impacted by the fires and assisting our customers in the midst of this tragedy."
Travelers
Also last year, Travelers said it was limiting new policies in the state. It did so at the same time as announcing it was increasing its rates for existing customers by an average of 15 percent. The premium hike affected more than 329,000 homeowners as of June 24.
Tokio Marine Holding
Two subsidiaries of Tokio Marine Holding—Tokio Marine America Insurance Co. and Trans Pacific Insurance Co.—announced in April 2024 that they were not going to renew a total of 12,556 homeowners policies as of July 1. The total premium value of these policies was $11.3 million, according to filings to the CDI.
Nationwide
In December 2023, Crestbrook Insurance Co., a subsidiary of Nationwide, stopped writing new homeowners policies in the state. In February 2024, it said it will stop renewing all home insurance policies in the state by June 15, 2025.
Farmers
Also in 2023, Farmers—which has the second-biggest market share in California—capped the number of new homeowners policies to 7,000 per month, and paused writing policies for condo and renters insurance. Last year, it said it was committed to increasing the number of new homeowners policies per month to 9,500 and it was bringing back condo and renters insurance.
USAA
In 2023, four United Services Automobile Association (USAA) companies announced plans to sign new homeowners policies only for homes that have a wildfire risk score of 1 on a scale of 32 as of March 2024.
Allstate
In 2022, Allstate temporarily stopped offering new policies in the Golden State due to the increased wildfire risk and growing costs. Last year, the company issued a statement saying it might start offering new policies in California should the state's authorities implement some changes to "fully reflect the cost of providing protection to consumers."
Chubb
Also in 2022, Chubb stopped writing high-value homes with high wildfire risk and stopped renewing policies for some high-value homes.
https://www.newsweek.com/these-californ ... es-2012158
为啥金融资本家们能做到对California Fire提前一年逃顶？
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