Liberty Mutual Won’t Renew 17K Fire Policies in California

Liberty Mutual’s LiMu Emu will soon turn its back on 17,000 policyholders of fire coverage across California. The reason: the firm won’t update its policy management “technology.”

Liberty Mutual Fire Insurance, a local unit of the Boston-based insurer, is now “non-renewing” 17,000 dwelling fire policyholders in the state, the San Francisco Chronicle reported.

The nonrenewals will proceed through November, after beginning last September, according to filings with the California Department of Insurance.

The company is retiring the “antiquated” technology it uses to manage the dwelling fire policies, “and it is not feasible to create a new system to support this product in California,” Liberty Mutual wrote in its filing.

The technology — presumably software — is being retired across the company, affecting Liberty Mutual Fire Insurance fire dwelling policies in multiple states, an unidentified spokesperson said.

Liberty Mutual is still offering dwelling fire insurance policies in California through its Safeco brand, according to the spokesperson. Liberty Mutual Fire Insurance policyholders, however, weren’t immediately offered a new policy under Safeco.

Dwelling fire insurance provides limited coverage compared to a typical homeowners policy, according to the Chronicle.

Its main purpose is to cover fire damage to the structure of the home itself, rather than the belongings inside, for people who don’t live in their homes full time.

The decision by Liberty Mutual to not renew the policies comes after large and small insurers have either stopped writing new policies or left California, citing rising costs and risk.

Last month, California Insurance Commissioner Ricardo Lara did not mince words when speaking of the difficulties facing homeowners after major pullbacks by State Farm, Allstate and other insurers.

“We’re not going to sugarcoat any of this,” Lara told an online panel organized by the Center for California Real Estate, a think tank for the California Association of Realtors. “Some people can’t find insurance at any price and others are losing coverage when they’ve never even had a claim.”

Last year, Liberty Mutual was the seventh largest property and casualty insurer in California, representing 4 percent of the total market and 9.8 percent of the fire insurance market through its subsidiaries.

The non-renewed policies represent 1 percent of Liberty Mutual’s total personal insurance policies in the state, and less than 2 percent of the total fire insurance market, according to the company and the California Department of Insurance.

— Dana Bartholomew