Liberty Mutual, California’s fourth-largest home insurer, has announced plans to withdraw from the state’s condominium and rental insurance markets by 2026. This move marks a significant shift in the state’s insurance landscape as California grapples with an evolving market and increasing risks.
Exit Timeline and Coverage Impact
The insurer will cease offering new condo and rental policies under the Liberty Mutual brand starting in 2025, with existing customers losing coverage beginning in 2026. According to filings with the California Department of Insurance, the company currently provides policies for nearly 67,500 condo owners and approximately 102,200 rental properties under its Liberty Mutual and Safeco brands.
Liberty Mutual has already stopped writing new condo and rental policies under the Liberty Mutual brand since December 2023. Despite this exit, the company stated it plans to maintain its presence in California, continuing to offer homeowners insurance and other core Safeco products.
A Broader Trend in California’s Insurance Market
Liberty Mutual’s decision comes amid growing challenges for insurers in California, including heightened risks from natural disasters and market volatility. While other major insurers have scaled back their operations in the state, complete exits from specific lines have been less common.
In 2023, Farmers Direct Property and Casualty Insurance Co., a subsidiary of California’s second-largest insurer, withdrew from the state. However, last week, Farmers announced its return to writing new condo and renters policies, citing improvements in California’s insurance market.
Additional Changes to Liberty Mutual Offerings
Beyond condo and rental insurance, Liberty Mutual plans to discontinue new watercraft policies in 2025 and stop offering motorcycle and specialty vehicle insurance in 2026. Auto insurance for drivers not meeting “good driver” criteria will also be phased out by 2026. The company cited financial underperformance in these lines as a key factor in the decision.
In August, Liberty Mutual further announced plans to discontinue fire dwelling insurance for 17,000 customers due to outdated technology, a move the company says is unrelated to the broader insurance crisis in California.
Support for Impacted Customers
Liberty Mutual has assured that all current policies will remain active until at least January 2026, and its agents will assist affected customers in finding alternative coverage. The company emphasized its commitment to California and expressed optimism about ongoing reforms aimed at stabilizing the insurance market.
“We remain committed to California, to our agent partners and to our mutual customers, and will continue to provide our core Safeco products in the state,” a spokesperson stated. “We are encouraged by progress on the Department’s Sustainable Insurance Strategy and our investment plans reflect this.”
Conclusion
As Liberty Mutual exits key insurance lines in California, the move underscores the pressures facing insurers in a state marked by rising risks and regulatory challenges. The impact on condo and rental policyholders will likely spark further discussions about the sustainability and accessibility of insurance in California.