Companies Claim Inflation and Extreme Weather Events Are To Blame
By Dolores Quintana
Starting on July 3, 2023, Farmers Insurance has joined a growing list of insurance companies that are either limiting new policies or restricting the policies they will write in California, as reported by KTLA.com. As other companies have stated, the reason for the decision is rising inflation and extreme weather events happening more often, which would cause higher business costs for insurance companies.
A Farmer’s Insurance spokesperson stated, as quoted by KTLA.com, “We are actively collaborating with the California Department of Insurance and other stakeholders to enhance the availability of property insurance in the state. Given the unprecedented inflation, severe weather occurrences, and rising reconstruction costs, we are committed to serving our customers while effectively managing our business.”
Residents who currently have active policies with Farmer’s should not be affected by this change. The limitations will affect anyone seeking to buy a new insurance policy in the state, according to the company’s spokesperson. This move comes after Allstate and State Farm made the decision to refuse to write new insurance policies for all residential and commercial properties in California.
Insurance Commissioner Ricardo Lara has moved to protect California residents’ insurance coverage multiple times in 2022 during fire season and introduced wildfire safety regulations meant to protect and lower insurance policy costs for Californians. These new coverage policy changes came after Southern California experienced a rainy spring, and the 2022 fire season in California was nowhere near as damaging as previous years.
Los Angeles and its wilderness areas, like the Santa Monica Mountains, Mandeville Canyon, and the Hollywood Hills, are always under threat from the danger of wildfires, as are the homes that are built in those areas. This is yet another concerning development for people who live in the region as well as homeowners in those areas.
Alice J. Roden started working for Trending Insurance News at the end of 2021. Alice grew up in Salt Lake City, UT. A writer with a vast insurance industry background Alice has help with several of the biggest insurance companies. Before joining Trending Insurance News, Alice briefly worked as a freelance journalist for several radio stations. She covers home, renters and other property insurance stories.