Farmers Insurance Group will re-open the doors for new homeowner policies in California.
The Los Angeles-based insurance firm, the second largest home insurer in the state, will resume writing home and home renter policies ahead of expected insurance reforms next year, the San Francisco Chronicle reported.
In July last year, Farmers capped new residential policies to 7,000 policies a month, becoming the third insurer behind State Farm and Allstate to slow or stop writing new policies in the state.
Now Farmers will hike the cap to 9,500 new customers a month, including home, condo owner and home renter policies. For the first time since April last year, it will welcome applications for condo and home renter insurance, an unidentified spokesperson told the newspaper.
Seventeen months ago, Farmers said it had choked off new policies because of “record-breaking inflation, severe weather events and reconstruction costs continuing to climb.”
This week, a Farmers executive said the firm recognized that the state insurance market had improved.
“With the impending implementation of Commissioner Ricardo Lara’s Sustainable Insurance Strategy in the coming year, we want to be well-positioned to provide even more coverage options to residents in the state,” Behram Dinshaw, Farmers’ president of personal lines, said in a statement.
Last year, Farmers controlled 15.5 percent of the state’s homeowner market, ranking in second place, according to the state Department of Insurance. State Farm ranked No. 1 with 20.6 percent of the market, with Allstate fifth with 6.4 percent, according to Fitch Ratings.
In April, a representative for Allstate said the insurer, which stopped writing new home insurance policies in November 2022, would also begin taking new customers after Lara’s insurance reform strategy had been implemented.
State Farm, the first to stop writing new home insurance policies, hasn’t sent similar signals. To stave off insolvency, it told regulators it needed major insurance rate hikes.
Lara’s reform strategy will likely raise prices for many customers, experts say, but will increase the availability of insurance in wildfire prone areas. To make use of the reforms, insurance companies will be required to write more policies in high-risk zones.
This year, Farmers re-opened new applications for certain types of commercial insurance, including commercial landlord insurance, as well as manufactured homes.
Later this month, Farmers will begin writing new personal umbrella insurance policies, which it hasn’t done since July last year. Such policies offer extra liability coverage.
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In March, the insurer also plans to accept new applications for manufactured home landlord insurance and certain types of dwelling fire insurance through its Foremost brand.
“We continuously monitor the changing market environment and make adjustments, as appropriate,” an unidentified spokesperson for Farmers said in a statement.
— Dana Bartholomew