Farmers Insurance places limit on home policies in California
OAKLAND - Bay Area homeowners who live in areas vulnerable to wildfires may have an even harder time to buy fire insurance. This comes after Famers Insurance announced it's limiting new homeowners policies in the state.
"About two years ago, (my premium) doubled. I think it went from about three to six," said Suki Dennis, an Oakland Hills homeowner.
Dennis said she was paying $6,000 a year to insure her home, which is roughly 2,200 square feet. But her company dropped her.
"Last October, they said we're not renewing," said Dennis. "It's crazy. I don't even have any big trees around me."
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She was not surprised by Farmers announcement to limit new policies in California. All State and State Farm made similar announcements earlier this year.
Farmers said starting this week, it'll cap the number of new homeowners policies each month.
In a statement, a spokesperson wrote "with record-breaking inflation, severe weather events, and reconstruction costs continuing to climb, we are focused on serving our customers while effectively managing our business."
"It's a complete lie. We went back and looked. For the last 30 years, insurance companies in California have made four times the profit that they made nationally on the average for selling homeowners coverage," said Harvey Rosenfield, founder of Consumer Watchdog.
Since the insurance industry is regulated by the state, Rosenfield said the insurance giants are trying to force state regulators to approve rate hikes.
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"This may all be about putting pressure on the insurance commissioner to approve rate increases for both Farmers, All State, and State Farm that are between 30 and 40 percent," said Rosenfield.
Dennis could not find a company that would insure her home. She ended up buying the California FAIR Plan, which is the last resort for homeowners who cannot find a policy on the private market.
Altogether, she said she now pays close to $7,000 a year.
"It's a lot of money for somebody that's never had a claim on anything," said Dennis.
