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State Farm will not renew 72K property policies in California
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Tokio Marine and Trans Pacific to cancel home insurance in California
Japanese firms join growing list of insurers limiting their risk exposure in the state
Two more home insurance companies say they’ll leave California before the onset of its heightened wildfire season.
Tokio Marine America Insurance and Trans Pacific Insurance plan to withdraw from the state beginning in July, Bloomberg reported.
The units of Japan-based Tokio Marine Holdings unveiled their plans in filings submitted to the California Department of Insurance. They said the decision will affect 12,556 policies, with premiums of $11.3 million.
“Given the small segment of personal lines business we write and escalating costs, we cannot sustainably support personal lines coverages and do not plan to return,” the company said in a statement emailed to Bloomberg.
“We remain committed to commercial lines in California — and across the country — and supporting our agents and customers with exceptional service through this transition.”
Personal lines include life, health, disability, car, renter and homeowner insurance for individuals.
The exodus of both firms adds to a growing list of major insurers across the Golden State that are ending or whittling down coverage during heightened risks posed by wildfires and other natural disasters fueled by climate change.
A few weeks ago, State Farm General Insurance said it would not renew 72,000 policies in July, nine months after announcing it would stop offering new coverage.
Other insurance companies have either paused new policies or will no longer offer new ones, including Allstate, The Hartford, Farmers Insurance and United Services Automobile Association.
To stabilize the market and lure insurers back to California, Insurance Commissioner Ricardo Lara last year announced a regulatory overhaul to allow insurers to factor future climate risks and reinsurance costs into their pricing.
In turn, insurance companies will be required to offer more coverage in fire-prone areas. Many of the details have yet to be released, and the earliest the plan could go into effect is December.
— Dana Bartholomew
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