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. submitted filings to the California Department of Insurance stating they will not renew 12,556 homeowners policies with a premium value of $11.3 million starting July 1. Also not being renewed are 1,624 dwelling fire and liability policies with a premium value of $1.7 million typically sold to owners of rental properties, as well as personal umbrella coverage.
The companies, subsidiaries of Tokyo-based Tokio Marine Holdings, are completely exiting the homeowners marketplace. Several major insurers, meanwhile, including State Farm, Farmers and Allstate, have limited their exposure in California by cutting back on the number of new policies they issue or tightening underwriting standards. State Farm, for example, announced in March it would not renew 72,000 policies.
I have yet to see any evidence that any of these coverage denials are related to being in any sort of higher risk area. We’re not talking about houses in the forest, or on coastal bluffs, or next to the beach, etc. That’s just a smoke screen to cover their incentives to put out news stories like this so they can pressure regulators to allow them to charge more for insurance.
This article doesn’t discuss locations whatsoever. I have yet to see any evidence either way. If you find something do let us know.
All of the articles speculate climate change is a factor, and I think that’s one of the things that the insurers quoted in the initial news. However, there was no evidence that was the case.