Farmers Now Eyeing California Favorably and Will Expand Its Coverage Options

Farmers Insurance said on Wednesday it will resume offering coverage for multiple lines of insurance in California to new customers.

The lines include condominium, renters, umbrella, landlord, vacant and manufactured home. Many of the reopened coverage offerings had been temporarily paused for more than a year.

Farmers last year began limiting new homeowners insurance policies in California along with pullbacks from several other insurers.

Related: California Commissioner Announces FAIR Plan Modernization Deal

The carrier plans a phased reintroduction beginning Dec. 14, 2024.

Farmers also plans to increase the number of homeowners policies it will accept from new customers to 9,500 per month, from its previous commitment of 7,000 monthly.

The company cited among its reasons for the decision regulatory steps taken by the state’s insurance commissioner and other stakeholders.

Related: How California’s Homeowners Insurance Crisis Is Affecting Brokers

The changes to insurance regulations ongoing in the state are part of the so-called Sustainable Insurance Strategy intended to stabilize the California homeowners insurance market and address the insurance crisis.

Carriers began pulling back from the state’s homeowners market, blaming blamed wildfire losses as well as regulations. They also began requesting steep rate increases.

State Farm applied for large rate increases in California, a year after the carrier got rate approvals of 7% and 20%. The insurer, the largest in California, insures nearly one-in-five homes in the state. It recently requested a 30% rate increase for its homeowners line, a 52% rate increase for renters and 36% rate increase for condo coverage.

Related: California Insurance Commissioner: Allow Cat Modeling in Rates for Wildfires

Allstate, which stopped issuing new California homeowners insurance policies in 2022, is seeking an increase in its California homeowners insurance premiums by an average of 34%. It would be the largest rate increase this year and would impact more than 350,000 policyholders.

According to Farmers, some of the changes and proposed changes, have made the state’s insurance risk more appetizing.

“Farmers Insurance has decided to take these steps to increase coverage availability for California consumers because we recognize that the state’s insurance marketplace has indeed improved,” stated Behram Dinshaw, president of personal lines for Farmers Insurance. “In addition, with the impending implementation of Commissioner Ricardo Lara’s Sustainable Insurance Strategy in the coming year, we want to be well-positioned to provide even more coverage options to residents in the state.”

To be considered for coverage, new customers will be required to meet all applicable underwriting guidelines to be considered. The reopened coverage options will be made available to consumers in a phased manner:

• Farmers Condominium insurance (both, owner-occupied and those rented to others), will reopen for new customers effective Dec. 14;
• Farmers Renters insurance will reopen for new customers effective Dec. 14;
• Farmers Personal Umbrella insurance will reopen for new customers effective Dec. 24;
• Foremost Manufactured Home Landlord insurance will reopen for new customers effective March 1, 2025;
• Foremost Dwelling Fire Landlord and Dwelling Fire Vacant insurance will reopen for new customers effective March 15, 2025.

Based on its assessment of an improved commercial insurance market, Farmers resumed accepting new Business Insurance applications from customers seeking coverage for various industries earlier this year. Those industries included: Auto Service & Repair; Habitational; Manufacturing; Real Estate; and Wholesale Distribution. On July 1, the company also lifted its temporary moratorium on new commercial automobile insurance policies in California.