Allstate, the state’s fourth-largest property and casualty insurance provider, and State Farm, the state’s largest provider, have stopped selling new home, condominium or commercial insurance policies in California. The insurance giants are the latest to say than they will no longer offer coverage in California, citing worsening climate and higher building costs that have made it harder to do business in the nation’s most-populous state. The moves by Allstate and State Farm may lead more home owners in the state to lean on the FAIR Plan, a state-offered “insurer of last resort” in high-risk fire areas.
California’s Department of Insurance says that the policy changes are related to factors “beyond our control, including climate change, reinsurance costs that have impacted the entire insurance industry, and global inflation.” Unfortunately, this issue is likely to spread to other carriers in much the same way as it has in the auto insurance market, so what do you need to know?
• Make your premium payments on time. There will no longer be a grace period for late payments and, more than likely, you will not be able to get the policy reinstated at the same price.
• Set your payments up on auto pay, with a few days cushion, to ensure there are no issues
• If your policy is already on auto pay, confirm that the payments are coming out of your account as expected.
• Expect your premium to increase with your renewal and know that there maybe a waiting period before your coverage goes into effect.
• Respond immediately to any requests from your insurance company, and call your agent if you have any questions or need clarification.