Farmers Insurance, the second-largest home insurer in California, has announced plans to significantly expand its coverage options for homeowners and other property types, signaling what the company calls an improvement in the state’s insurance market.
The Los Angeles-based insurer revealed it will increase the number of new homeowners insurance policies it writes to 9,500 per month, up from 7,000. Additionally, Farmers plans to resume offering policies for condominiums, renters, landlords, and other property types—many of which had been temporarily suspended for over a year.
“We recognize that the state’s insurance marketplace has indeed improved,” said Behram Dinshaw, president of personal lines at Farmers Insurance, in a statement on Wednesday.
A Reversal Amid a Challenging Landscape
The move comes as other major insurers, including State Farm General, have scaled back their presence in California. Earlier this year, State Farm announced it would not renew 72,000 home and property policies, citing soaring reconstruction costs, increasing wildfire risks, and outdated state regulations.
Farmers’ decision to expand contrasts with these retreats, though the company did not provide specifics about the improvements it cited in the market. Already this year, wildfires such as the Franklin fire in Malibu and the Mountain fire in Ventura County have destroyed hundreds of homes, underscoring the ongoing challenges of insuring properties in wildfire-prone areas.
Insurance Reforms Play a Role
Farmers’ expansion is seen as a response to proposed reforms from California Insurance Commissioner Ricardo Lara, aimed at stabilizing the state’s insurance market. Lara’s Sustainable Insurance Strategy includes provisions to allow insurers to incorporate advanced wildfire risk modeling and reinsurance costs into premiums. These changes are intended to make the market more sustainable for insurers while ensuring consumer access to coverage.
“This is a positive step forward for California homeowners, renters, and businesses who have faced significant challenges accessing coverage,” said Lara. “While more work needs to be done, this is a clear sign our reforms are working, as insurance companies plan to re-enter and expand in California.”
Farmers anticipates further growth in coverage options as these reforms take effect in 2025.
Mixed Reactions from Consumer Advocates
Not everyone is celebrating Farmers’ decision. Consumer Watchdog, a Los Angeles-based advocacy group, questioned the timing and impact of the announcement.
“The public deserves a full accounting of how many homeowners Farmers has abandoned before congratulating them on selling more policies again,” said Carmen Balber, the group’s executive director.
Farmers plans to reintroduce its paused policies in phases, starting with condominium and renters insurance this Saturday. The company has also resumed offering new commercial automobile insurance policies in the state, following the lifting of a temporary moratorium in July.
Looking Ahead
As California continues to grapple with wildfire risks and the fallout from an unstable insurance market, Farmers’ decision may provide some relief to consumers who have struggled to find coverage. However, the success of this expansion will likely hinge on the effectiveness of Lara’s reforms and the state’s ability to address the root causes of its insurance crisis.