Farmers Insurance expands home coverage in California, saying market has improved

Laurence Darmiento, Los Angeles Times on Dec 12, 2024

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Farmers Insurance plans to increase the number of homeowners insurance policies it will write and begin offering coverage again for new customers in other types of dwellings, citing improvements in California's home insurance market.

The Los Angeles-based company, the state's second-largest home insurer, said it will boost the number of homeowners policies it will accept from new customers to 9,500 per month, up from 7,000. It also will resume writing new policies for condominiums, renters, landlords and other lines. It said many of those policies had been temporarily paused for more than a year.

"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 statement Wednesday.

The decision runs counter to some other large insurers who have pulled back from the market amid widening wildfire losses, including State Farm General, the state's largest home insurer.

State Farm in March said it would not renew 72,000 home, apartment and other property policies, citing soaring reconstruction costs, increasing wildfire risks and outdated state regulations.

Farmers did not offer more detail on how the market has improved, and did not immediately respond to a request for comment.

Already this fire season, Southern California has experienced home losses, including a handful of homes during this week's Franklin fire in Malibu. The Mountain fire last month in Ventura County destroyed 243 buildings and damaged dozens more.

Farmers also said it is expanding coverage to be "well-positioned to provide even more coverage options" next year once a package of insurance reforms proposed by Insurance Commissioner Ricardo Lara goes into effect.

The commissioner's Sustainable Insurance Strategy calls for allowing insurers to use new types of computer models to forecast wildfire losses, and to include in their premiums the cost of reinsurance, which insurers buy to protect themselves from catastrophic losses.

"This is a positive step forward for California homeowners, renters, and businesses who have faced significant challenges accessing coverage. While more work needs to be done, this is a clear sign our reforms are working, as insurance companies plan to re-enter and expand in California," Lara said in a statement.

Carmen Balber, executive director of Consumer Watchdog, a Los Angeles group that has been critical of the industry and Lara's reforms, said it was premature to "celebrate" the company's decision.

"The public deserves a full accounting of how many homeowners Farmers has abandoned before congratulating them on selling more policies again," she said in a statement.

Farmers said it would offer the paused policies in phases, starting with condominium and renter's insurance on Saturday.

On July 1, 2024, Farmers also lifted its temporary moratorium on new commercial automobile insurance policies in California.