Farmers Insurance to Resume Selling New Home Policies in california,Seeks Rate Hike
SACRAMENTO,CA – In a notable growth for California‘s troubled homeowners insurance market,Farmers Insurance announced today it will begin offering new home insurance policies across the state,ending a pause implemented last year. The move comes as the insurer concurrently seeks a rate increase under the state’s recently reformed insurance regulations.
insurance Commissioner Ricardo Lara hailed the announcement as “a major turning point,” stating, ”We will be getting peopel off the FAIR Plan.Consumers, homeowners, nonprofits, and small business(es) are going to be able to get coverage on their own terms. As we enter the holiday season,I am grateful for the hard work and continued commitment of my Department staff who focused on facts and moved these critical reforms forward with urgency and transparency.”
The decision follows the finalization of Lara’s Lasting Insurance Strategy nearly a year ago – a series of reforms intended to address California’s escalating home insurance crisis. The strategy allows insurers to utilize forward-looking models of wildfire risk when setting prices and to pass along some of the costs of reinsurance – insurance for insurers - to policyholders.
While experts predicted these reforms would likely lead to higher premiums,Lara emphasized the potential for increased policy availability. Many homeowners have been forced to rely on the California FAIR Plan, a state-created, privately run insurer offering less comprehensive coverage, frequently enough at a higher cost.
Several major insurers have already applied for rate increases under the new rules, including Mercury, CSAA, and USAA, all requesting hikes around 6.9%. Rate increases of 7% or higher trigger a mandatory hearing with consumer groups. The FAIR Plan has also requested a 35.8% rate increase, its first since 2023, which remains under consideration.
All new Farmers policies will be subject to the insurer’s eligibility guidelines.
“By removing the cap on offering new homeowners policies, Farmers is doubling-down on its commitment to california homeowners, expanding choice and availability for consumers across the state,” said Behram Dinshaw, president of personal lines for Farmers Insurance, in a statement. “We are also reaffirming our commitment to serving the needs of residents by submitting a new Sustainable Insurance Strategy-inspired rating plan which is designed to expand our offerings to more homeowners across California.”
