First, we're starting off
with tonight's main point.
The home insurance crisis is growing.
ABC10 has learned another
insurance company is changing how
it does business in California,
citing catastrophic storms, wildfires,
and the rising cost of repairs.
As we reported,
both State Farm and Allstate
made the decision in recent
months to press pause on new
homeowners insurance policies,
and AIG stopped offering home
insurance last year as well.
Becca Ha Beggar has more on the latest
company to make changes and why residents.
Are now choosing to leave the state?
Yeah,
Alex. In an internal memo
obtained by ABC10, Foremost,
a company owned by Farmers Insurance,
says effective August 1st,
Foremost will no longer accept new
business for certain specialty properties,
including landlord, mobile,
home, landlord, condo,
vacant properties and renters.
Why will the memo sites the increasing
cost of doing business in California?
And insurance companies aren't
the only ones feeling and acting
on those increased expenses.
We keep our property pretty well clear.
Back in
2019, I spoke with Laura and Charlie
Callahan, who'd owned their home in El
Dorado County for more than 25 years.
We had our homeowners insurance for
over 20 years and we got the letter,
as people refer to it,
and we were cancelled.
I'm now paying four times
what I was paying before.
It's gone for less than $1000 a year.
It's almost $4000 a year.
So they did something about it.
Obviously, a lot has changed.
I spoke with them from their
new home in Tennessee.
There are a lot of reasons a
lot of people leave California.
Where does home insurance and the price
of home insurance all on your list?
It really came to homeowners.
Insurance was the big one
because it was an unknown,
You know, we didn't know what it,
the future held for that.
If we even were able to go
to keep getting insurance,
much less how much we're
gonna have to pay for
it. Back in 2019,
one of their frustrations was no
matter how much defensible space
they cleared around their house,
it didn't seem to matter to
insurance companies I always kept
working on my property taking down. Brushed
and things like that
all the time. But
it doesn't matter. It doesn't make it 100%
no matter what you do, it's never 100%.
Since then, California Insurance
Commissioner Ricardo Lara,
seen here in 2019 at a series of town
halls he held on this very topic,
has attempted to address that,
a California Department of
Insurance spokesperson tells ABC10.
Commissioner Lara has mandated insurance
companies to recognize and reward
wildfire safety and mitigation efforts
made by homeowners and businesses.
His new regulation requires insurance
companies to submit new rates
that recognize the benefit of.
Safety measures such as upgraded
roofs and windows,
defensible space and memberships
in community wide programs
such as Fire Wise USA,
among other consumer protections.
I asked the Callahan's if that would
have made a difference to them.
Laura says she thinks it will make
insurance companies leave the state, try
to force a business to do business.
They're going to leave.
I just don't see how it's feasible.
Now Alex, this is a big story that's
going to affect more than just the many
people already living in fire prone areas.
For example, Farmers Insurance confirmed
to me today that effective this week it
is limiting its new homeowners policies,
citing record-breaking inflation,
severe weather events and reconstruction
costs continuing decline.
Now, specifically,
my sources tell me Farmers is now
limited to 7000 new homeowners insurance
policies per month in all of California.
Why? Well, since all states,
State Farm and AIG are no longer
riding new home insurance policies,
people looking for insurance have fewer
options and are flocking to Farmers.
And so Farmers is trying to limit
its risk exposure with this monthly
cap on new policies.
And let's be clear, if you have a mortgage,
you are required to have
homeowners insurance. Yeah, bingo.
So unless you own your home out. Right.
Insurance really isn't optional.
And the more companies that leave
or limit new policies,
the more that squeezes the entire market.
And that is part of a bigger
story I'm working on.
Yeah. And this is a story that
we will continue to follow.
So if you have something to add,
help us tell this story.
You can text the team at 916-321-3310.
You can also scan the QR code
on your screen right now to join
the To the Point text group.