More insurance companies have announced that they will not renew policies for California homeowners after 2024.
Four companies, Merastar Insurance Co., Unitrin Auto and Home Insurance Co., Unitrin Direct Property and Casualty Co. and Kemper Independence Insurance Co., attributed the move to a nationwide restructuring decision by their parent company, Kemper Corp, according to documents filed with the California Department of Insurance.
“The action to be taken by the company is part of a nationwide business decision to exit the preferred personal lines market,” a filing said. “Kemper’s personal lines insurance companies represent a small portion of Kemper’s total property and casualty insurance business statewide.”
The documents also said the company’s business in California was “relatively small”.
“We made the decision to exit the preferred home and auto business nationwide because it was not a strategic fit within our long-term portfolio,” a company spokesperson said in a statement to KTLA.
“The decision was not based on considerations specific to any one state, including California. The decision allows us to redeploy significant capital to our core specialty auto and life businesses, which continue to serve California residents and small businesses.”
State Farm and Allstate, two of the larger insurers in the Golden State, also announced earlier this year that they would no longer accept insurance applications for all business and personal property in the state.
State Farm is the largest property insurer in California, while Allstate was the fourth largest in 2021. Company officials confirmed the news to KTLA in two separate statements.
State Farm and Allstate announced the 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 for the summer wildfire season that will increase payouts and evacuation benefits for wildfire survivors in 2021. The new protections would mean “larger payouts for some claims and less red tape for insurance companies,” Lara said.
Last year, the commissioner enforced new insurance pricing regulations under the Safer from Wildfires framework, which require insurers to offer discounts to consumers who take safety measures, such as upgrading roofs and windows, to prevent wildfire risks.
The new scheme aims to reduce the cost of insurance and provide transparency in risk assessment for consumers.
The state doesn’t require prospective homeowners to have insurance, but many mortgage lenders may require proof of insurance as a loan condition.
