- Liberty Mutual, the fourth-largest home insurer in California, will discontinue its condo and renter policies, citing increasing risk and volatility. Existing policyholders will lose coverage in 2026.
- The decision has sent shockwaves through the community, with many Californians struggling to find affordable insurance due to rising premiums and insurer cancellations. Over half of Californians have been affected by coverage issues or premium increases.
- Escalating costs and risks associated with climate change, particularly wildfires, are driving insurers to rethink their risk exposure in California. Since 2020, major insurers like State Farm and Allstate have also withdrawn from the state.
- In an attempt to stabilize the insurance market, California allows insurers to use predictive computer models to set premiums based on climate change risks. However, this has led to concerns about further rate hikes for policyholders.
- Despite regulatory efforts, the insurance market remains volatile. The departure of Liberty Mutual is seen as a significant setback, potentially leading to a further decline in coverage options and increased costs for those who can still find insurance.
In a significant setback to California's insurance market, Liberty Mutual, the state's fourth-largest home insurer, announced that it
will be discontinuing its condo and renter policies. This development comes at a time when the Golden State is grappling with a crisis in the insurance industry, marking yet another red flag for homeowners and policyholders across the state.
According to filings with the
California Department of Insurance, Liberty Mutual will stop offering new condo and renter policies starting next year. Existing policyholders will then lose their coverage in 2026. The news surprised the community, as many Californians are already struggling to find affordable insurance due to increasing premiums and insurer cancellations. (Related:
Liberty Mutual insurance partners with same company Best Buy used to discriminate against hiring White people).
"
We are simplifying and focusing our product investments, targeting core lines of business while reducing our menu of product offerings
," a spokesperson for Liberty Mutual told
Newsweek. However, many observers are skeptical about this claim, given that the company has been wrestling with losses in the state for years.
The issue goes far beyond Liberty Mutual. Several large insurers have withdrawn from California in recent years, citing escalating costs and increased risks, particularly wildfires. Since 2020, State Farm and Allstate have pulled back on their coverage, leaving many Californians in the lurch.
Wildfires, which have scorched over one million acres of land this year alone, are a major concern for insurance companies. These devastating events are becoming increasingly common, and the associated losses are straining insurers' resources. As a result, many companies are rethinking their risk exposure in the state.
It's not just wildfires that are pushing insurers to the breaking point.
Labor shortages and higher fees for home repairs are also contributing factors. In the face of these challenges, many insurers are finding it increasingly difficult to justify writing new policies in California.
Departure of Liberty Mutual is a setback in California's efforts to stabilize its insurance market
The impact on policyholders is already stark. Over half of Californians have reported being
affected by rising premiums or having their coverage canceled outright. The situation has created a perfect storm of financial and emotional stress for homeowners and renters alike.
One particularly affected group is condo owners. According to filings, Liberty Mutual currently insures about 67,500 condos in California. These policyholders will soon be forced to find new coverage, a daunting task given the limited options in the market.
Moreover, the departure of key insurers is exacerbating an already unstable market. The state's Department of Insurance has been trying to implement reforms to stabilize the situation. However, these efforts have been criticized by consumer advocates who fear that the new regulations will lead to even sharper rate hikes for policyholders.
In a bid to mitigate the crisis, California Insurance Commissioner Ricardo Lara announced that
insurers will be permitted to use advanced computer models to predict future risks when setting premiums. In exchange, companies must expand coverage in areas most at risk from wildfires.
Despite these efforts, the market remains volatile, with cross-currents, contradictions and chaos. While some companies like Farmers Insurance have expressed optimism about the new market conditions and are expanding their coverage, others are walking away.
The departure of Liberty Mutual represents a significant setback in California's efforts to stabilize its insurance market. As more and more insurers withdraw, the state risks seeing a further decline in coverage options and a surge in costs for those who can still find insurance.
For now, the state is left to grapple with the immediate impact of this decision, with many condo and renter policyholders facing the daunting task of finding new coverage before 2026.
Visit
DebtCollapse.com for similar stories.
Watch a discussion on
home insurance. We lost everything – Florida citizen's Insurance rejection skyrocket.
This video is from
Treasure of the Sun on Brighteon.com.
More related:
Economic crisis: Americans are unprepared for the coming collapse.
Report: U.S. manufacturing sector slashed 26,000 jobs in November as industry woes persist.
HALF of all U.S. states going BANKRUPT, financial report finds.
Biden’s economic time bomb: A warning to Trump.
Sources are:
DailyMail.co.uk
Newsweek.com
AOI.com
Brighteon.com