Homeowners in California now have even fewer choices in homeowners insurance carriers. The Hartford Financial Services Group, better known as The Hartford, announced Wednesday that it would no longer issue new homeowners insurance policies in California starting in February 2024.
The firm noted that this change would also impact The Hartford’s joint homeowners insurance program with AARP.
In a statement, The Hartford said that the “unique challenges” presented by California’s homeowners insurance environment led it 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,” the statement read. “We do not enter into this decision lightly, and we appreciate and support efforts like Commissioner [Ricardo] Lara’s Sustainability Insurance Strategy to help bring stability to the market. We will be watching those efforts closely.”
The Hartford noted that it would continue to write new policies for all other types of existing insurance policies in California. In addition, the firm noted that it would continue to renew existing home insurance policies that are consistent with its underwriting guidelines.
The Hartford joins other major insurers, including State Farm and Allstate, in pulling out of California. In statements about their decisions to cease issuing new property and casualty policies in California, State Farm and Allstate both cited increased risks from wildfires, as well as rising reinsurance and rebuilding costs.
According to the Insurance Information Institute, 1.265 million California homes were at risk for extreme wildfires in 2022, about 400,000 more homes than any other state. Data from CoreLogic shows that the percentage of homes built in California’s Very High Fire Hazard Severity Zones (FHSZ) has declined from 5.5% to 3.5% over the past 15 years, but building in Moderate FHSZ areas has nearly doubled since 2008. While wildfire risk in these zones is lower, it is still present.
In addition to State Farm, Allstate and The Hartford, smaller carriers including Merastar Insurance Co., Unitrin Auto and Home Insurance Co., Unitrin Direct Property and Casualty Co., and Kemper Independence Insurance Co. have announced that they will not be renewing homeowners’ policies in California in 2024.
With insurers leaving the state, the California FAIR Plan, the state’s insurer of last resort, saw enrollment jump to 272,846 homes in 2022, prior to the departures of State Farm, Allstate and The Hartford.
A nationwide survey of 1,634 homeowners and non-homeowners conducted by Mphasis Digital Risk found that 90% of respondents were concerned about rising homeowners insurance costs. Additionally, 27% were considering moving to a different state to get away from ever-increasing insurance costs.
Related
FAQs
Tokio Marine and Trans Pacific join State Farm and Allstate in discontinuing coverage for California residents.
What two more insurance companies pull out of California? ›
Two more insurers are pulling out of California's troubled homeowners insurance market, straining a marketplace that already has seen the pullback of several other companies that have cited increase costs related to wildfire risks. Tokio Marine America Insurance Co. and Trans Pacific Insurance Co.
Why are insurance companies withdrawing from California? ›
A report from Gallagher Re last year shows the threat of damaging wildfires in conjunction with inflation and pricing challenges has led to a distressed insurance and reinsurance market, particularly in California. Top photo: Homes in Santa Clarita, California.
Do homeowners insurance companies share information with each other? ›
Yes, insurance companies share any information related to insurance claims on your CLUE report. Insurers use this information to assess the risk when someone applies for an insurance policy.
Why is Allstate leaving California? ›
Allstate cited wildfire risk, the cost of rebuilding homes and the rising price of reinsurance as reasons for halting new policies in 2022.
Is Allstate cancelling homeowners insurance in California? ›
Allstate stopped issuing new insurance policies for all business and personal property in California back in 2022. Since then, companies like State Farm, Farmers Insurance and The Hartford have made similar business moves.
Is USAA pulling out of California? ›
To clarify, State Farm, Allstate Farmers USAA, Travelers, Nationwide and Chubb are still active in California, they have just either limited or stopped writing new home insurance policies. Current home insurance policies with these providers are still being honored.
Is AAA writing homeowners insurance in CA? ›
Insurance products in California are offered through AAA Northern California Insurance Agency, License #0175868, in Montana by AAA Montana, Inc., License #9756, in Nevada by AAA Nevada and in Utah by AAA Utah.
Is State Farm pulling out of California? ›
When will the change take effect? Starting in July 2024, State Farm will stop insuring more than 30,000 residential homes in California, and starting in August, will discontinue coverage on 42,000 commercial apartment properties.
Who is still insuring homes in California? ›
5 Best Homeowners Insurance Companies in California
- Hippo: Our pick for fast quotes.
- Liberty Mutual: Our pick for discounts.
- Farmers: Our pick for customizable coverage.
- Nationwide: Our pick for inclusive standard coverage.
- USAA: Our pick for club members.
Last month, State Farm, the Illinois-based company and California's largest insurer, cited soaring costs and the increasing risk of natural disasters — like wildfires and outdated regulations — as reasons it won't renew the policies of thousands of homes.
Why is Geico pulling out of California? ›
The conditions in the state have led the insurers to believe that California drivers are too expensive to insure. Auto accidents increased 25% between 2020 and 2021, where at the time, premiums increased only 4.5%. The insurers were paying more in claims than they were making in premiums.
Who still offers home insurance in California? ›
5 Best Homeowners Insurance Companies in California
- Hippo: Our pick for fast quotes.
- Liberty Mutual: Our pick for discounts.
- Farmers: Our pick for customizable coverage.
- Nationwide: Our pick for inclusive standard coverage.
- USAA: Our pick for club members.
State Farm, California's largest home insurance company, announced it would be discontinuing coverage for 72,000 homes and apartment policies in the state starting this summer. The insurer blamed inflation, regulatory costs, and the increasing risks from catastrophes for its decision to scale back in the blue state.
Is USAA still writing homeowners insurance in California? ›
To clarify, State Farm, Allstate Farmers USAA, Travelers, Nationwide and Chubb are still active in California, they have just either limited or stopped writing new home insurance policies. Current home insurance policies with these providers are still being honored.
