Thousands more Californians will lose their home insurance this year as two more insurers flee the state.
Tokio Marine America Insurance Company and Trans Pacific Insurance Company filed notices to the California Department of Insurance saying they would stop offering homeowners coverage and umbrella policies.
Both companies, owned by Japanese firm Tokio Marine Holdings, together insured 12,556 homeowners in the state, worth $11.3 million in premiums, according to company filings.
They are the latest in a line of insurers, including Farmers Direct and State Farm, which have limited or stopped doing business entirely in California – many citing the intensifying risk of climate disasters.
As a result, over half of Californians say they have been affected by rising premiums for property coverage or have been dropped by their insurer in the last year, stark new data from Redfin shows.
Tokio Marine America Insurance Company and Trans Pacific Insurance Company filed notices to the California Department of Insurance saying they would stop offering homeowners coverage and umbrella policies
Growing numbers of insurers have limited or stopped doing business entirely in California – many citing the intensifying risk of climate disasters (Pictured: Wildfires in Paradise, California in 2018)
Insurers pulling out of states cuts down on competition, while labor shortages and higher fees for home repairs are also pushing up prices.
Some 51 percent of homeowners in the Golden State say they have been affected by a worsening home insurance crisis, according to a survey from the real estate company.
In 2023 Farmers Direct Insurance announced it was leaving the state entirely, while Allstate said it was no longer writing new policies in California.
Earlier this year, State Farm, California’s largest insurance company, announced it would not renew policies for 72,000 homes – after previously saying it would also not take on any new applications for coverage.
The company cited an increased risk of natural disasters including wildfires, the effect of inflation on prices and rising reinsurance costs.
Tokio Marine America Insurance Company and Trans Pacific Insurance Company said they would start sending non-renewal notices to customers starting on July 1.
A Tokio Marine America spokesperson told the San Francisco Chronicle in a statement that it would continue to provide commercial insurance.
‘Given the small segment of personal lines business we write and escalating costs, we cannot sustainably support personal lines coverages and do not plan to return,’ they said.
Rates have soared for many California homeowners.
Jeff Waack, the board treasurer for a condo in West Hollywood, told DailyMail.com earlier this month how the annual cover for the building has increased 400 percent this year from approximately $23,000 to $116,000.
‘Our management company sent out proposals to 12 different insurance companies this year and every single one declined to give us a policy,’ he said.
West Hollywood is an urban area, and is not at particular risk of wildfires, hurricanes or flooding, Jeff said.
Jeff Waack said he ‘nearly fell of his chair’ when he saw how much the insurance premium had risen this year for a West Hollywood condo building
Jeff said the West Hollywood building is not in area at particular risk of wildfires, hurricanes or flooding
He has lived in the building – which has 54 units – for decades, and says the last claim he remembers the board filing was 18 years ago.
As a last resort, the condo was forced to take coverage from a non-California admitted company, which means it sells policies which are not backed by the state.
‘I pretty much fell off my chair when I saw the price,’ Jeff said. ‘It feels like they just randomly picked a number that is high enough to really help their bottom line. They know they’ve got us over a barrel and we have to go for it.’
Across the US as a whole, grim forecasts predict home insurance rates will hit a record high this year – with the typical annual premium rising 6 percent to $2,522 by the end of 2024.
While premiums are rising across the country, people living in some states are worse off than others.
The typical annual premium will rise to $2,522 by the end of 2024, according to predictions from insurance comparison platform Insurify
Alongside California, the home insurance crisis in Florida has intensified over the last several years as costly natural disasters have made it difficult for insurers to maintain profitability in the state.
According to Redfin, 11 insurers have liquidated amid growing flood and storm risk.
Hurricane Ian caused $109.5 billion in damage in 2022. This was the third most expensive disaster to hit the US and the most destructive in Florida's history, according to the National Oceanic and Atmospheric Administration (NOAA).
Some 70 percent of Florida homeowners said they had been affected by rising coverage costs or had been dropped by their insurer, according to the Redfin survey.
This is compared to 44.6 percent of homeowners nationwide.
And 11.9 percent of people in the Sunshine State who plan to move in the next year cited rising insurance costs as a reason - roughly twice the national share of 6.2 percent.