SAN DIEGO (KGTV) — Chris Cott says he has spent three days searching for answers after getting this letter from his insurance company.
"I still haven't gotten an explanation," Cott said.
The letter states that his auto insurance will expire in May and will not be renewed. The reasoning is that " this insurer no longer offers insurance in California."
"We've lost Blockbuster and a few things, but an insurance company? This is pretty big," Cott said. "Something totally unexpected. I'm not getting any help."
Cott has Farmers Direct Property and Casualty Insurance, also called Farmers Direct. It's an affiliate of Farmers Insurance and insures around 100,000 Californians. A representative tells ABC 10News that the branch is shutting down this year.
"Now it's like starting over," Cott said. "It really is. It's like getting divorced and getting onto a dating app."
Farmers said this closure will increase operational efficiency and manage risk exposure. Industry experts believe it's more than that.
"While selling residential property insurance policies has become almost impossible," said Steve Young, general counsel for Independent Insurance Agents And Brokers of California. "Even automobile insurance policies are extraordinarily difficult."
Steve Young says auto insurance companies are leaving California for a few reasons. Now that the pandemic is behind us, more people are driving, and insurance claims are higher than ever. Companies want to raise policy rates, but California's strict regulations make it difficult to do so promptly.
"Many insurers have not been able to get any rate relief or rate adjustments from the California Department of Insurance," Young said.
A spokesperson for the State Insurance Commissioner says Californians pay less on average for auto insurance than other states. He pointed to 100 other insurance companies that write policies in California. Cott says he's ready for a divorce.
"I would really like to find somebody to replace them and just part ways," Cott said.
Farmers Insurance says Farmers Direct customers should call 1-800-438-6381. Other Farmers Insurance customers should contact their local agent with questions. People experiencing challenges should call the Department of Insurance at 800-927-4357 or visit insurance.ca.gov so we can help.
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FAQs
Farmers Auto Insurance announced it is pulling out of California. The insurance company says this shut down is to increase operational efficiency an manage risk exposure.
What insurance company did Farmers buy out? ›
Farmers Completes $3.94B Acquisition of MetLife Home and Auto Business.
Why are Farmers Insurance rates so high? ›
Farmers is so expensive because of agent commissions and rising costs overall for insurance companies. At $1,044 per year, the average Farmers car insurance policy is a lot more expensive than the national average of $671 per year for a policy with minimum coverage.
Is foremost insurance pulling out of California? ›
According to a company filing with the California Department of Insurance, the withdrawal is part of a countrywide strategy to end insurance for condos. Foremost stopped writing new condominium business in May of 2022 in California and took the same step in other states beginning this year.
What insurance companies are leaving California? ›
Tokio Marine and Trans Pacific join State Farm and Allstate in discontinuing coverage for California residents.
Why is State Farm leaving California? ›
The insurer blames the rising risk of natural disasters like wildfires in California and the state's outdated regulations.
How many Farmers have gone out of business? ›
Vilsack concerned about future of agriculture and food production. U.S. farmland declined by nearly 20 million acres between 2017 and 2022. That's according to the latest USDA Census of Agriculture, which was released on Tuesday.
Who is Farmers owned by? ›
Farmers is privately owned by the James Pascoe Group, in turn owned by Anne Norman and family. James Pascoe Ltd and Fisher & Paykel Finance bought Farmers on 6 November 2003 from Foodlands Associates for NZ$311 million.
Why did MetLife sell to Farmers? ›
The closure provides the Farmers brand significant opportunity to expand its customer reach with a truly national presence, grow its core property and casualty business and strengthen its position as one of the leading personal lines carriers in the United States.
Why are insurance companies pulling out of California? ›
The conditions in the state have led the insurers to believe that California drivers are too expensive to insure. Auto accidents increased 25% between 2020 and 2021, where at the time, premiums increased only 4.5%.
The Chronicle reports that insurance industry magazines linked Geico's decision to close California sales offices to its failure to raise insurance prices in compliance with Sacramento regulations and other market forces.
What is the cheapest car insurance in California? ›
Geico, USAA, Mercury Insurance, Progressive and CSAA are the five cheapest car insurance companies in California, according to our research. The average cost of full-coverage car insurance in California is $193 per month or $2,313 per year.
Is Allstate pulling out of California? ›
Allstate stopped issuing new insurance policies for all business and personal property in California back in 2022. Since then, companies like State Farm, Farmers Insurance and The Hartford have made similar business moves.
Who is the largest insurer in California? ›
State Farm is the largest auto insurer in California as well as the largest property and casualty insurer in the United States overall, providing more than 87 million insurance policies.
Who is still writing homeowners insurance in California? ›
5 Best Homeowners Insurance Companies in California
- Hippo: Our pick for fast quotes.
- Liberty Mutual: Our pick for discounts.
- Farmers: Our pick for customizable coverage.
- Nationwide: Our pick for inclusive standard coverage.
- USAA: Our pick for club members.
At the same time, AM Best has affirmed the Long-Term Issue Credit Ratings (Long-Term IR) of “bbb+” (Good) on the outstanding surplus notes of Farmers Insurance Exchange (Woodland Hills, CA) and Farmers Exchange Capital (Wilmington, DE). The outlook of these Credit Ratings (ratings) is stable.
Is there a shortage of farm workers in California? ›
In studies conducted with the California Farm Bureau in 2017 and 2019, more than half reported that they simply couldn't find enough people to fill farm, ranch and other agricultural jobs.
