Four More Home Insurance Companies Leaving CA

Four more home insurance companies are leaving California, continuing a trend that has been ongoing throughout 2023.

In state filing documents, Kemper Independence Insurance Co., Merastar Insurance Co., Unitrin Direct Property and Casualty Insurance Co., and Unitrin Auto and Home Insurance Cos. — all of which are subsidiaries of Kemper Corp. — said they would withdraw homeowners’ coverage effective Jan. 1.

The four companies intend to fully leave the market by March 2025, according to the documents.

Kemper Independence has about 33,200 home policies, Merastar has 110, Unitrin Direct Property and Casualty has 223, and Unitrin Auto and Home has 9,900, the documents said.

“Considering the modest market share, we do not expect this withdrawal will create any market availability issues,” each of the companies said in the documents.

The decision to leave California is part of a national move by the businesses to exit the preferred personal lines marketplace, according to the companies.

Kemper Independence issued more than $1.5 million in refunds to thousands of homeowners in the state after overcharging policyholders for wildfire risk, according to a California Department of Insurance news release from March. Kemper Independence and Unitrin Auto and Home also agreed to pay an over $600,000 penalty to the state, the news release said.

Major insurance companies, such as Allstate and State Farm, are among those to recently exit the market, along with smaller providers like AmGUARD Insurance and Falls Lake Insurance, multiple outlets have reported, noting the impact of wildfires for homeowners and insurers.

The state does offer its FAIR Plan, a last-resort option that provides basic fire coverage for high-risk properties, and, as of spring 2023, more than 100 home insurers remained in the state.