Published November 9, 2023 at 11:00 AM PST | Reading time: 2 minutes
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Four small insurers will cease writing and renewing homeowners, renters, and auto insurance in California beginning in 2024, according to a filing with the state’s Department of Insurance.
In mid-October, Kemper Independence Insurance Company filed a notice with the state that the company and three insurers it owns will no longer do business in California. Kemper Independence, Unitrin Direct Property & Casualty Company, Merastar Insurance Company, and Unitrin Auto and Home Insurance Company will stop writing new policies as of Jan. 1, 2024, and cease renewals effective March 1, 2024, according to the filing.
Kemper Independence, Merastar, and Unitrin Direct Property & Casualty currently provide home, renters, and condo insurance in California. Unitrin Auto and Home Insurance Company only sells private passenger auto insurance in the state.
The withdrawals will affect approximately:
2,900 auto insurance policies from Unitrin Direct
24,500 auto policies underwritten by Kemper Independence Insurance
9,900 homeowners policies from Unitrin Auto and Home Insurance
223 home insurance policies written by Unitrin Direct
110 homeowners policies from Merastar Insurance
33,200 home and fire police by Kemper Independence
Combined, the policies represent about 0.39% of California’s total home insurance market and 0.23% of its auto insurance market, according to filing documents.
“Considering the modest market share, we do not expect this withdrawal will create any market availability issues,” Kemper general counsel Christopher T. Longeway said in the filing.
Impact on California insurance market
As part of its withdrawal from the home insurance market, Kemper Independence and its three subsidiaries will be barred from filing a request to create a replacement program for at least three years, according to a response letter from Gerald Hill of the Department of Insurance.
California’s home insurance market has already taken multiple hits in 2023. Seven of the state’s 12 largest home insurance companies have either limited business in California or withdrawn from the marketplace.
California’s largest home insurance company, State Farm, paused writing new policies, and its second-largest, Farmers, has limited the number of new policies it will write to 7,000 per month.
California’s home insurance costs have risen significantly since 2021, when the average annual cost to insure a $200,000 home in the state was $972. In 2023, the average is $1,056. Keep in mind that the average home value in California is $747,352, according to Zillow.
Kemper said it will begin its withdrawal on Jan. 1, 2024, and finish by Feb. 28, 2025. It will continue to service existing business, including paying claims for covered losses that occur while a policy is still in force, according to the company’s filing.
It will notify policyholders by sending non-renewal notices and notifying policyholders’ agents of record.
Evelyn PimplaskarEditor-in-Chief, Director of Content
Evelyn Pimplaskar is Insurify’s director of content. With 30-plus years in content creation – including 10 years specializing in personal finance – Evelyn’s done everything from covering volatile local elections as a beat reporter to building fintech content libraries from the ground up.
Before joining Insurify, she was editor-in-chief at Credible, where she launched and developed the lending marketplace’s media partnership’s content initiative and managed the restructuring of the editorial team to enhance content production efficiency. Formerly, as tax editor for Credit Karma, Evelyn built a library of more than 300 educational articles on federal and state taxes, achieving triple-digit year-over-year growth in e-files from organic search.
Her early career included work as a content marketer, vice president and managing officer of a boutique public relations agency, chief copy editor for 14 weekly Forbes publications, reporting for large and mid-sized daily newspapers, and freelancing for the Associated Press.
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