State Farm to offer renewals to policyholders affected by Los Angeles fires

State Farm announced Wednesday that it will offer renewals to residential policyholders affected by the Los Angeles County fires that it previously planned to drop.

The ruling applies to insurance policies held by homeowners, rental unit owners and residential community associations, which include condominium associations.

That figure includes about 70 percent, or 1,100, of the 1,626 residential policies still in effect in Pacific Palisade’s main 90272 ZIP code — and thousands more in the neighborhood and elsewhere in the county. The offer does not apply to policies that had already lapsed when the fire broke out on January 7.

The Department of Insurance said that of the thousands of insurance policies State Farm had targeted for non-renewal, more than 7,600 were in the Palisades fire zone. There were also 525 more in the Eaton Fire in San Gabriel Valley and additional insureds elsewhere.

It’s unclear how many of these policies were already defunct when the fires started.

“Our mission is to help people recover, and that’s exactly what we’re doing right now for those affected by the fires. It’s such a horrible tragedy,” said Jon Farney, chief executive of State Farm Mutual Automobile Insurance Co., parent company of State Farm General, its California subsidiary.

Farney made the remarks in a lengthy interview Tuesday before the insurer spoke to The Times about the policy change.

State Farm said in March it would not renew about 30,000 homeowners, rental property and other property insurance policies. It also said it would stop offering commercial insurance policies to apartment owners and would not renew about 42,000 such policies in place. Renters insurance policies that insure the tenant’s belongings have not been affected.

The move by the Bloomington, Ill.-based insurer sparked outrage given the enormous scale of the Pacific Palisades and other fires in Los Angles County, which damaged or destroyed more than 12,000 structures and killed more than two dozen people.

State Insurance Commissioner Ricardo Lara had urged insurers last week to suspend pending non-renewals in the Palisades and Eaton fire zones. Its spokesman, Michael Soller, said the department is in talks with State Farm to get more details about the announcement.

“All eyes are on the insurance companies right now, including mine. We will continue to work to ensure everyone’s claims are paid fairly, promptly and in full,” Lara said in a statement Wednesday in response to State Farm’s decision.

Lara also announced that it had expanded the limits of a moratorium it issued last week that prohibits insurers from issuing new notices of cancellation or non-renewal for a year. This applies whether or not the owners have suffered a loss.

The Insurance Commissioner does not have the authority to suspend non-renewals previously sent to policyholders.

Soller said that under current law, if policyholders are noted for non-renewal but the policy is still in force and they suffer a “total loss,” State Farm is required to offer them a two policy renewals anyway. However, this law does not apply to damages less than a total loss.

State Farm spokesman Bob Devereux said policyholders in fire zones would receive one-year renewal offers and those with total losses would receive two renewals, as required by law.

The expansion adds 22 ZIP codes to the Pacific Palisades and Eaton fire zones and protects homeowners living in the Hurst, Lidia, Sunset and Woodley fire zones for the first time.

In an interview Tuesday, Farney said the company received 6,300 residential and auto claims, making it the largest wildfire State Farm has ever experienced. The company is the largest property and casualty insurer in the United States.

However, he said it was too early to determine the damage, although at least one estimate puts it at more than $200 billion, which could surpass Hurricane Katrina and make it the costliest disaster in history. history of the country.

“So early in this type of event, especially since it is still ongoing, we have no information on the magnitude that the event will have for us, and even less for the industry,” he declared.

He called the company’s decision in March not to renew 72,000 policies very difficult, but said it was driven by calculations that State Farm could not afford to take on more risk because of the possibility of being inundated with claims in the event of a disaster.

“You have to manage the amount of focus you have and the financial risk you have, so we are able to ensure we can deliver on our promises,” he said.