Farmers Insurance Taking on More Policies in California

Farmers is looking to do more business in California. The insurer is increasing the number of new home insurance policies it will issue in the Golden State by 2,500 per month. It has also resumed selling new policies for condo, renters, umbrella, landlord, vacant, and manufactured home coverage.

“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 Insurance, in a company news release on Dec. 11.

The company is increasing the number of new home insurance customers it will accept in California by about 36%, from 7,000 to 9,500 per month.

Farmers initially capped the number of new home insurance policies it would issue and paused coverage entirely for other property insurance lines in 2023 to avoid assuming excess risk in the state caused by natural disasters and unfavorable rate limits.

State of the home insurance market in California

Inflation and increased risk from wildfires have created a high-risk insurance market in California, leading insurers to pause or exit the state’s market. Property owners face higher premiums, non-renewals, and fewer insurance options.

Since 2022, seven of the top 12 property insurers in California have either paused or implemented restrictions on writing new home insurance policies. State Farm and Allstate exited the California property insurance market in 2023, largely due to the increased risk posed by wildfires in the state.

The California Department of Insurance (CDI) has since released a sustainable insurance strategy to address the challenges inflation and climate change-related disasters have caused for the insurance industry.

The CDI aims to modernize the state’s insurance market, make coverage more accessible, decrease the number of people enrolled in the state’s FAIR Plan, and implement catastrophe models and mitigation. One way the CDI said it plans to do this is by having insurers commit to writing at least “85% of their statewide market share in wildfire-distressed areas identified by the Insurance Commissioner.”

What’s next? The reopening timeline

Farmers resumed offering condo, renters, and personal umbrella insurance for new customers in December. New policies for manufactured home landlord insurance, dwelling fire landlord insurance, and dwelling fire vacant insurance, from Farmer’s partner Foremost, will resume this March.

“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,” said Dinshaw.