Alright, so California's insurance market is supposedly "strengthening." Yeah, right. I'll believe it when I see it. We've been burned too many times before to just blindly trust some PR spin.
Farmers Insurance is pulling a rabbit out of its hat, claiming they're gonna write more policies in California, even in those oh-so-lovely wildfire zones. Insurance Commissioner Ricardo Lara is calling it a "major turnaround." Give me a break.
What's the catch? There's always a catch.
Oh, right, a 6.99% average statewide rate increase. So, they're "expanding coverage" by squeezing homeowners even harder? Sounds about right. But hey, they're throwing us a bone with a bigger bundling discount! A whole 22% if you give them both your home and auto business. How generous.
They're targeting "distressed areas," which is code for "places where everyone's terrified of their house burning down." And they're gonna aggressively market to 300,000 consumers starting in early 2026. That's… nice? Or maybe it's just good business. After all, desperation breeds compliance.
This whole thing is supposedly aligned with Lara’s “Sustainable Insurance Strategy.” Sustainable for whom, exactly? The insurance companies, offcourse. Because, let's be real, these "strategies" always seem to benefit the corporations more than the actual people struggling to keep a roof over their heads.
Farmers is saying this helps stabilize the market by reducing reliance on the FAIR Plan, which is the state's insurer of last resort. But what if the FAIR Plan was actually properly funded instead of relying on the same old song and dance?
The company claims claim severity keeps climbing for theft, fire, and liability losses. Frequency might be down, but severity is up, thanks to inflation and heavier litigation costs. Water losses are apparently a different story, with frequency down but severity up because people are shifting to higher deductibles. So basically, everyone loses, just in different ways.
But wait, Best’s Credit Report says Farmers' wildfire mitigation steps helped them post a 99.8% combined ratio. So they're doing fine. Maybe even better than fine. Makes you wonder if this whole "crisis" was a little overblown to begin with.
Behram Dinshaw, president of personal lines at Farmers, is saying all the right things about commitment to California homeowners. He's claiming they’re "doubling down" and expanding choice statewide. It all sounds great on paper, but I'm not exactly holding my breath.
Farmers had been writing new homeowners business even during the capped period, previously limiting volume to 7,000 policies a month. So, they were never really gone, were they? Just conveniently scarce to drive up demand and justify those rate hikes.
They're bragging about being the largest property casualty insurer headquartered in California, with $7.91 billion in direct premiums. That's a lot of money. And they want more.
The filing includes a forward looking wildfire catastrophe model and net reinsurance costs, both required under the Sustainable Insurance Strategy. Farmers also wants to raise its home and auto bundle discount from 15% to 22%.
But here’s the kicker: new customers will be required to meet all applicable underwriting guidelines to be considered for coverage. So, if you actually need insurance because you live in a risky area, good luck getting it.
It's the same old game, just with a fresh coat of paint. They'll take your money, promise you the world, and then find every excuse to deny your claim when the inevitable disaster strikes. Don't fall for it.
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