More companies exit California’s embattled homeowners market | Insurance Business America
More companies exit California’s embattled homeowners market
The exodus continues
Two more insurance companies are exiting California’s embattled homeowners market, according to several reports.
AmGUARD Insurance and Falls Lake Insurance are set to withdraw their homeowners’ insurance programs within the coming months, following a string of similar decisions by major industry players like State Farm, Allstate, and Farmers.
AmGUARD is a subsidiary of Berkshire Hathaway’s GUARD Insurance Companies and held policies for over 50,000 homeowners as of 2022.
Deputy insurance commissioner Michael Soller said the company first came to California in 2019 and has experienced major losses in the past couple of years “that were unusually high and not typical of the market as a whole.”
Falls Lake’s market share is a lot smaller, he added, consisting of approximately 900 individuals.
The two companies did not comment on their withdrawal, but insures that have made similar decisions had attributed their exits to inflation, increased wildfire risk, and a regulatory environment that makes it hard to get rate increases approved quickly.
Over a hundred companies continue to provide homeowners insurance in California, according to the North Bay Business Journal. The state also offers insurance options through the FAIR Plan, but this is considered an “insurer of last resort.”
“The automobile insurance market is in turmoil,” said American Agents Alliance, which represents independent insurance agents and brokers. “Our agents and the consumers we serve are losing access to insurance markets as insurers terminate agency appointments and restrict the submission of business”
What are your thoughts on the insurance crisis facing California? Feel free to comment below.
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