The Big Three have all left. Hat tip to Richard for sending this in:
Farmers Insurance has limited new homeowners insurance policies in California, joining other major national insurance providers.
Farmers, the second-largest provider of homeowners insurance in the state, said it placed the cap on the number of policies in California effective July 3. The company cited high costs and wildfire risks.
“With record-breaking inflation, severe weather events, and reconstruction costs continuing to climb, we are focused on serving our customers while effectively managing our business,” Farmers Insurance said in a statement, adding it will limit the new policies “to a level consistent with the volume we projected to write each month before recent market changes.”
It’s getting harder and harder to find homeowners insurance in states that are the most vulnerable to the effects of climate change.
Farmers’ shift follows decisions by State Farm and Allstate, two of America’s largest insurers. The companies said they would no longer write new homeowners policies in the state. Both cited wildfire risk as a reason for the move and blamed limits placed on insurance premiums in states like California. Insurance companies also say rising costs for labor and building costs make replacing homes costly.
“The cost to insure new home customers in California is far higher than the price they would pay for policies due to wildfires, higher costs for repairing homes, and higher reinsurance premiums,” said a statement from Allstate explaining its decision to stop writing new policies. lastfall.
Like with the 3% mortgages, those who are already in the club are the lucky ones. Hopefully they can count on the Big Three insurers continuing to cover them at a reasonable cost. There will always be insurance available, thanks to the California Fair Planwhich was established in 1968. If/when it becomes insolvent, the taxpayers will probably provide support.
From now on, home buyers will be paying double or triple what buyers previously paid for insurance, but they are paying double or triple for the homes too, so it shouldn’t be a big deal. Living here is worth it!
Plus, the 40% of buyers who pay cash for their new homes can always self-insure.