Slot Gacor Gampang Menang Situs Slot Gacor

State Farm halts new property insurance in California – Orange County Register

State Farm said on Friday 26 in May that it will stop accepting new applications for personal and commercial property insurance in California, citing rising construction costs and its “rapidly growing catastrophe exposure.”[ads1]; Here’s a property burning during the LNU Lightning Complex Fire in Pope Valley, California, on August 20, 2020 (Max Whittaker/The New York Times)

State Farm said on Friday 26 in May that it will stop accepting new applications for property and casualty insurance in California, citing rising construction costs and its “rapidly growing catastrophe exposure.”

The policy change for personal and business areas will take effect Saturday, May 27, State Farm said. The change does not apply to personal car insurance or existing home insurance policies in the state.

SEE MORE: Housing development may be delayed due to insurance battles

In a statement, the company said it would work with the California Department of Insurance to restore market capacity in the state.

“We take our responsibility to manage risk seriously,” the company wrote. “However, it is necessary to take these actions now to improve the company’s financial strength.”

State Farm has the largest share of property and casualty insurance policies in the United States and controls about 8.3% of California’s market, writing at least $7 billion in premiums, according to 2021 data compiled by the state.

RELATED: California homeowners may continue to lose insurance as wildfires loom

Michael Soller, a spokesman for the California Department of Insurance, said Friday night via email that the policy change by State Farm was among factors “outside of our control, including climate change, reinsurance costs affecting the entire insurance industry and global inflation.”

Instead, DOI is focusing on “protecting consumers” through its Safer from Wildfires rebate program, Soller said.

Established in October 2022 and touted as the first of its kind, the statewide program requires insurance providers to discount policies for property owners who reduce wildfire threats by installing fire-rated roofs, enclosing eaves and creating ember-resistant zones. Insurers have 180 days to submit a fire risk assessment, or score, which the state can appeal.

Property insurance companies in recent years have pulled coverage from tens of thousands of homeowners across the state in the wake of devastating wildfires.

DOI Commissioner Ricardo Lara in September 2022 invoked a law — signed in 2018 by then-Gov. Jerry Brown – prohibits insurance providers from canceling or refusing to renew plans for properties affected by wildfires before 12 months after the fire.

RELATED: FAIR Plan is seeking an almost 50% premium increase from the Department of Insurance

A moratorium on insurance price increases during the pandemic only increased the tension in the insurance industry.

“The risks are getting worse, and rates need to go up to ensure insurers are solvent and operational in California,” Seren Taylor, a senior legislative spokeswoman for the Personal Insurance Federation of California, told the Bay Area News Group in August 2022.

Lara in 2019 ordered California’s FAIR Plan, an insurance plan of last resort, to expand coverage beyond fire to include liability, theft and other parts of a homeowner’s insurance policy. Insurance companies, which administer and fund the state FAIR plan, have challenged the newer rules in court.

In March of this year, FAIR Plan administrators agreed to double the plan’s commercial coverage limits to $20 million for businesses such as homeowner associations that were unable to find insurance through traditional providers.

The number of California properties facing severe wildfire risk is expected to increase sixfold in 30 years, according to the nonprofit First Street Foundation.

DOI provides updates on consumer rights and options on the website. The consumer hotline is 1-800-927-4357.

Staff writer Ethan Varian and CalMatters contributed to this report.

Source link

Back to top button