California Property Owners Are In Trouble
Statefarm Refuses to Renew More Than 70K Property Insurance Policies
Insurance carriers have been exiting coastal markets in droves. Florida, as well as a handful of middle-America regions that are prone to tornados, have been grappilng with the insurance carrier exodus. But California has been one of the states that’s been hit the hardest.
First Allstate announced that they will be pausing the issuance of all homeowner, condo, and commercial insurance policies throughout California. The rationale behind the move was to “protect current customers.”
Now, the largest homeowner’s insurance company in the nation - Statefarm - is canceling more than 72,000 policies across the state (California). A total of 42,000 apartment buildings, and 30,000 single family homes have been left scrambling to find a new insurance provider.
The news comes on the heels of California’s Insurance Commissioner approving a 20% rate increase for all policies. This makes it tough, if not impossible, for property owners to secure coverage at a comparable price to what they previously had in place.
The steep spike in coverage costs helps carriers hedge against potential losses due to natural disasters, and it forces property owners to shoulder more of the burden of insurance claim pay-outs.
With companies leaving and insurance costs rising, more California property owners and investors will continue to find themselves between a rock and a hard place. The lack of coverage options and heightened premium pricing leaves only two options: either pay through the nose, or go with a lesser-known carrier that may not be able to provide the same coverage as a Statefarm or Allstate; neither are ideal.
If you’re considering a home purchase, sale or investment this year, and you’d like professional guidance and assistance throughout the process, our team is here to help.
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