Evening view of Downtown San Bernardino, California. (Photo: Matt Gush, Shutterstock)
Liberty Mutual Latest Insurance Company To Terminate Polices In CA
Liberty joins Allstate, State Farm, Farmers in limiting insurance options in California
By Evan Symon, July 27, 2023 4:05 pm
According to new reports on Thursday, Boston-based insurance company Liberty Mutual will cease to offer business owner’s policies, which include both property and liability risks for businesses, to customers in California this fall, becoming the latest company to limit what policies or types of insurance that they offer in the state.
While insurance companies have been reducing their presence in California in the past few years, some have made it harder for residents to obtain insurance, such as GEICO closing down all 38 of their offices in the state last year and State Farm raising driving insurance rates in March. However, the largest action came in May when State Farm Insurance, the largest property and casualty insurance company in California, announced that they would no longer be accepting new applications for any kind of insurance other than personal vehicle insurance due to large increases in construction costs and inflation. About a week later, it was revealed that Allstate had done the same thing, stopping all new homeowners insurance policies for the last several months. Then, earlier this month, Farmers announced new limits on the number of new homeowner insurance policies it will give each month.
For the companies, the reasons were simple: large increases in construction and reconstruction costs, inflation, and a largely increased risk of danger due to more wildfires. Despite public outcry at having fewer options for insurance and making it harder to buy a home, the companies implemented their plans in full. And on Thursday, Liberty Mutual became the latest company to join in the trend.
According to a statement from Liberty Mutual, the insurance company decided to make the new change due to California’s worsening catastrophe charges and inflation. No new business owner’s policies will be given starting October 1st, with all current policies to go under non-renewal beginning in December, meaning that the company will slowly get out of the business owner’s policy side of the business throughout 2024 as policies end. In addition, Liberty further noted that they will continue to offer other forms of commercial insurance in California and remain otherwise committed to the state.
Liberty latest insurance company to limit policies in CA
“We regularly assess our position in every market to ensure we are delivering competitive, innovative products that meet our customer needs while achieving our business goals,” said the company in a statement. “Sometimes that results in a determination that a product is no longer effectively delivering on those aspirations, and we must retire that line.
“We will not renew our current book of this line of business beginning in December. We remain committed to the commercial insurance market in California and continue to offer other insurance products for small businesses throughout the state.”
Insurance experts told the Globe on Thursday that, despite the announcement affecting many Californians, Liberty has actually had the smallest insurance limitation this year, and that they are still otherwise active in California.
“This will give business owners one less option, and will leave some high and dry very soon insurance-wise,” Trevor Connery, a lobbyist who has worked for insurance companies in the past, told the Globe on Thursday. “But this wasn’t a wide ending of insurance or pullout like the others. This was more calculated, and the mix of property and liability risks was just too much for them to bear really.
“That being said, this only shows the worsening insurance market in California, at least on the home and business and property side of things. And the sad thing is is that Liberty will likely not be the last to do something like this.”
Other insurance companies in the state are likely to make decisions on new insurance applications soon.
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