Farmers Insurance joins State Farm, Allstate in ending new home insurance policies in California due to wildfire risk

SAN FRANCISCO (KGO) — ABC7 reported how State Farm Insurance stopped selling new home insurance policies in California on Saturday – now a second major carrier, Allstate Insurance, confirmed today that it has stopped selling new home insurance policies in California. state last year. On top of that, sources tell 7 On Your Side that a third insurer, Farmers Insurance, is limiting policies for new customers. The exodus comes as wildfire season approaches.

It’s hard not to worry. But all three companies say they are still serving existing customers, and there are more than 100 other insurance companies still issuing new homeowner policies. However, after the relentless wildfires of the past few years, homeowners in these hotspots will find it even harder to get coverage.

RELATED: State Farm will no longer insure new homes in California due to wildfire risk and construction costs

The threat of wildfires has increased every year, ripping through forests, scarring hills and destroying entire communities.

And amid the devastation, thousands of homeowners in disaster areas have lost coverage over the years.

Then last week State Farm Insurance, California’s largest carrier, stopped issuing all new homeowner’s policies in the state — at least temporarily. The company cited a growing threat of natural disasters, as well as rising construction costs and inflation.

And Allstate Insurance, the fourth-largest insurer in California, just confirmed that it stopped issuing new home insurance policies last year. Allstate also blamed wildfires and higher costs, saying, “The cost to insure new residential customers in California is far higher than the price they would pay for policies.”

RELATED: Will the New Regulations Do Enough to Prevent Homeowners from Losing Fire Insurance?

Now, sources tell 7 On Your Side, Farmers Insurance is also putting a hold on new policies. We asked Farmer’s today if it has stopped issuing new homeowners insurance in California. The company was vague, stating, “Our primary goal is to continue to meet the needs of our customers…we remain actively engaged with the California Department of Insurance and other interested parties to improve the availability of property insurance in the United States. State. “

Consumer advocate Amy Bach of United Policyholders says more than 100 carriers are still offering new home insurance policies — though they’re increasingly wary of California risk.

“State Farm’s announcement is certainly not helpful news, but we need to keep it in perspective. I encourage consumers to stay calm,” Bach said. “Since the fires, I’ve been talking to insurance executives, they’re all worried about wildfires out west… They don’t take blind risks anymore because they can buy data and they can see the pine needles in your gutter.”

RELATED: California wildfire insurance ‘loophole’ affecting Bay Area survivors dropped by carriers

Consumer Watchdog’s Harvey Rosenfield was skeptical of State Farm’s motives for ending the new fostering policies. “Insurance companies cannot simply decide to stop selling insurance to new customers,” he said.

“They’re trying to pressure the insurance commissioner to approve an additional $721 million increase in personal home insurance premiums that State Farm requested a few weeks ago,” Rosenfield said.

State Farm says, “We take our responsibility to manage risk seriously…” and “It is necessary to take these steps now to improve the financial strength of the business.”

The company said it would monitor California’s efforts to mitigate fire losses in preparation for a return to market.

RELATED: FAIR Plan Insurance Criticized For Expenses, Lack Of Coverage At Insurance Commissioner Hearing

“It’s already difficult for people to get insurance in these interface areas between nature and the city,” Bach said.

Bach expects thousands more homeowners in fire-prone areas will have to resort to purchasing insurance through the state’s FAIR program — it’s very expensive and only provides coverage minimum.

Already just under 300,000 Californians have used the state’s FAIR insurance. If you’re having trouble getting a new home insurance policy, let 7 On Your Side know. There are resources to help you navigate the options and find the ones that still offer new policies.

Check out more stories and videos from Michael Finney and 7 On Your Side.

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