State Farm, California’s largest insurer, recently announced it won’t renew home insurance policies for 72,000 houses and apartments across the state, citing rising costs and increased wildfire risks.
State Insurance Commissioner Ricardo Lara told KNX News’ Nataly Tavidian the news is troubling.
“We are coordinating with the department in Illinois, where they're domiciled, to not only get their financial statements but also look at their financial recovery plan,” he said. “We need that data, which is essential to see what is truly happening at State Farm and, most importantly, what we're going to do as a department to protect those Californians that are under those policies.”
If you’re one of the State Farm customers who received a non-renewal notice, Lara says to call the Department of Insurance for help.
“We will make sure we have an insurance expert with you so that we help you transition and connect you with insurance companies who are writing policies in California,” he said.
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Afraid your insurance company might drop you next? Lara said your best bet is to give them a call and tell them you’re really, really trying to keep your home wildfire-proofed.
“I think the important thing to tell consumers now is to constantly be in communication with your insurer about the modifications you've done to your property, the home hardening If you live in a wildfire-prone area,” he said. “Make your home as fortified as possible, because we want to make sure there is no excuse for them to drop you.”
According to KCRA 3, seven of the 12 largest insurance groups in California have paused or restricted new homeowner policies in the last year.
In January, State Farm increased rates 20% for existing home insurance customers. Harvey Rosenfield, founder of the advocacy group Consumer Watchdog, told KNX News the hikes were driven by greed, not necessity.
“It’s kind of extortion, and it’s worked. They have frightened the lawmakers in Sacramento, and the insurance commissioner, Ricardo Lara, has said that he’s just gonna focus on making people pay what the companies want so that they come back into the marketplace,” he said.
In a further bid to keep insurers from leaving California, Lara released a plan Thursday that would let companies use computer models to justify rate increases. Consumer Watchdog Executive Director Carmen Balber told KCAL the computer modeling might be unreliable and raise rates unfairly.
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