Residents can purchase policies for condos and renters’ coverage as part of the company’s ‘phased reintroduction.’
Farmers Insurance resumed writing policies Dec. 14 for some types of insurance in California and increased the number of homeowners’ policies it would offer each month.
“What this Farmers announcement indicates is that there’s been a lot of work done and we should start to see some changes,” Rex Frazier, president of the Personal Insurance Federation of California—an advocacy group representing Farmers, State Farm, and Allstate, among other companies—told The Epoch Times.
“Hopefully we’ll see more of these announcements and start to see small cracks in the dam that set the stage … and we can start seeing more fundamental change.”
In what the company described as a “phased reintroduction” after pausing offerings in May 2023, Californians can now purchase policies for condominiums and renters’ insurance.
Personal umbrella insurance coverage will resume Dec. 24.
Policies for manufactured homes will be offered starting March 1, 2025, and those for vacant homes and landlords two weeks later.
The insurer is also raising the number of policies per month it will write to homeowners from 7,000 to 9,500.
“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,” Behram Dinshaw, president of personal lines for Farmers Insurance, said in a statement.
The company also resumed writing policies for commercial automobile customers in July and business insurance in May after finding “an improved commercial insurance market.”
“We want to be well-positioned to provide even more coverage options to residents in the state,” Dinshaw said.
Lara’s strategy includes allowing for forward-looking catastrophe models as opposed to prior regulations that required companies to calculate rates based on historic losses.
“With our changing climate we can no longer look to the past,” he said. “We are being innovative and forward-looking to protect Californians’ access to insurance.”
A San Francisco-based consumer advocacy group said the signs are encouraging.
“[This] means insurers have gotten one of the highest priority wish list items they’ve said they need in order to open back up for business in our state,” Amy Bach, representing United Policyholders—a nonprofit advocating for insurance customers, said in a statement. “That news, combined with the announcement by Farmers Insurance, should give consumers hope that competition and options will be returning.”
One reason some companies have been hesitant to expand offerings, according to industry representative Frazier, is that California’s regulations have limited rate hikes, and requests to raise prices have proven so time consuming that by the time the higher rates are approved, inflation dictates the need for another increase.
A faster regulatory process is needed to help stabilize the market, he said.
Looking to expand policy offerings, Lara also announced that the largest insurance companies must start writing more policies, at least 85 percent of their total coverage, in areas at high risk of wildfire.
Regulators are looking to reduce the number of policies written by the FAIR plan, an insurer of last resort backed by insurance companies. Hundreds of thousands of homeowners have been forced onto the plan in recent years as insurers issued nonrenewals statewide.
Policies offered through the FAIR plan are significantly more expensive than traditional insurance and provide less coverage.
One homeowner in Northern California said his premiums went up by a factor of three when he was left with the FAIR plan after his insurance was dropped.
“I’m paying more for less, and it’s really hurting us financially,” Warren Ware of Mendocino County told The Epoch Times on Dec. 14. “I hope I can get off of this FAIR plan soon.”
Linda and Warren Ware’s home is seen in Mendocino County, Calif., on April 19, 2023. The property was deemed too risky for insurance companies to cover because of fire danger. Travis Gillmore/The Epoch Times
One newly elected lawmaker, from Modoc in rural Northern California, with a background in emergency management said fire insurance issues are top of mind.
“That is huge … that’s a lot of why I ran for office,” Assemblywoman Heather Hadwick told The Epoch Times on Dec. 16. “So I plan to get very involved.”
Concerns about fire danger and insurance accessibility and affordability are impacting her district and her family, she said.
Assemblywoman Heather Hadwick speaks at a press conference on career pathways at Shasta College in Redding, Calif. on Dec. 16. Travis Gillmore/The Epoch Times
“My kids are in college right now, and they don’t want to come back and live here, and that’s devastating to me,” Hadwick said.
The first-term lawmaker expressed eagerness to receive her committee assignments and said she looks forward to working with legislators on both sides of the aisle to find solutions that benefit Californians.
State legislators in both parties and Gov. Gavin Newsom spoke often over the past year about a desire to quickly address insurance problems.
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