Another insurance company announced its scaling back business in the Golden State.
The Hartford recently announced it won’t offer new home insurance policies beginning on Feb. 1, 2024.
“The homeowners’ insurance environment in California has unique challenges that have required us to reconsider the viability of writing new homeowners’ business in the state. Based on these challenges and our analysis of the trends, we have decided to stop offering new homeowners policies starting Feb. 1, 2024,” a company spokesperson told KTLA in an emailed statement.
“We do not enter into this decision lightly, and we appreciate and support efforts like Commissioner Lara’s Sustainability Insurance Strategy to help bring stability to the market. We will be watching those efforts closely.”
The Hartford has a homeowners insurance market share of less than 1% in California, according to data from the S&P Capital IQ.
The announcement won’t impact business insurance or personal auto policies; current customers can renew their policies.
The move comes after State Farm, Allstate, Farmer’s Insurance and other companies announced they would stop accepting insurance applications for all business and personal property statewide last year.
State Farm is the largest property insurer in California, while Allstate was the fourth-largest company in 2021. Company representatives confirmed the news to KTLA in two separate statements.
State Farm and Allstate announced these decisions in the wake of rising business costs and increased risks of natural disasters in the state, particularly wildfires.
California Insurance Commissioner Ricardo Lara announced new insurance protections in effect for the summer wildfire season, increasing payouts and evacuation benefits for wildfire survivors in 2021. The new protections would mean “larger payouts for some claims and less red tape from insurance companies,” according to Lara.
In 2022, the commissioner enforced the new insurance pricing regulation under the Safer from Wildfires framework, requiring insurance companies to provide discounts to consumers who follow safety measures such as upgraded roofs and windows to prevent wildfire risks.
The new regulation aims to reduce insurance costs and create consumer risk rating transparency.
The state doesn’t require potential homeowners to have insurance; however, many mortgage lenders may require some proof of insurance as a loan condition.
