Another homeowners’ insurance carrier leaves California

Homeowners in California now have even fewer choices in homeowners insurance carriers. The Hartford Financial Services Group, better known as The Hartford, announced Wednesday that it would no longer issue new homeowners insurance policies in California starting in February 2024.

The firm noted that this change would also impact The Hartford’s joint homeowners insurance program with AARP.

In a statement, The Hartford said that the “unique challenges” presented by California’s homeowners insurance environment led it to “reconsider the viability of writing new homeowners’ business in the state.”

“Based on these challenges and our analysis of the trends, we have decided to stop offering new homeowners policies starting Feb. 1, 2024,” the statement read. “We do not enter into this decision lightly, and we appreciate and support efforts like Commissioner [Ricardo] Lara’s Sustainability Insurance Strategy to help bring stability to the market. We will be watching those efforts closely.”

The Hartford noted that it would continue to write new policies for all other types of existing insurance policies in California. In addition, the firm noted that it would continue to renew existing home insurance policies that are consistent with its underwriting guidelines.

The Hartford joins other major insurers, including State Farm and Allstate, in pulling out of California. In statements about their withdrawals from California, State Farm and Allstate both cited increased risks from wildfires, as well as rising reinsurance and rebuilding costs.

According to the Insurance Information Institute, 1.265 million California homes were at risk for extreme wildfires in 2022, about 400,000 more homes than any other state. Data from CoreLogic shows that the percentage of homes built in California’s Very High Fire Hazard Severity Zones (FHSZ) has declined from 5.5% to 3.5% over the past 15 years, but building in Moderate FHSZ areas has nearly doubled since 2008. While  wildfire risk in these zones is lower, it is still present.

In addition to State Farm, Allstate and The Hartford, smaller carriers including Merastar Insurance Co., Unitrin Auto and Home Insurance Co. , Unitrin Direct Property and Casualty Co., and Kemper Independence Insurance Co. have announced that they will not be renewing homeowners’ policies in California in 2024.

With insurers leaving the state, the California FAIR Plan, the state’s insurer of last resort, saw enrollment jump to 272,846 homes in 2022, prior to the departures of State Farm, Allstate and The Hartford.

A nationwide survey of 1,634 homeowners and non-homeowners conducted by Mphasis Digital Risk found that 90% of respondents were concerned about rising homeowners insurance costs. Additionally, 27% were considering moving to a different state to get away from ever-increasing insurance costs.