California loses two more home insurers in growing crisis – as shock new report shows half of residents have seen coverage dropped or premiums jump

Thousands of Californians will lose their home insurance this year as two more insurers flee the state.

Tokyo Marine America Insurance Company and Trans Pacific Insurance Company filed notices with the California Department of Insurance saying they would stop offering homeowners coverage and umbrella policies.

Both companies, owned by Japanese firm Tokyo Marine Holdings, together insured 12,556 homeowners in the state, worth $11.3 million in premiums, company documents show.

They are the latest in a string of insurers, including Farmers Direct and State Farm, that have limited or halted operations in California – with many citing the rising risk of climate disasters.

As a result, more than half of Californians say they have been hit by rising property coverage premiums or been dropped by their insurer in the past year. facts of Redfin shows.

A growing number of insurers have limited or even halted operations in California – many citing the rising risk of climate disasters (photo: Wildfires in Paradise, California in 2018)

Insurers pulling out of states reduce competition, while labor shortages and higher home repair costs also drive up prices.

About 51 percent of homeowners in the Golden State say they are affected by a worsening home insurance crisis, according to a survey by 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 on 72,000 homes — after previously saying it also would not accept new coverage applications.

The company cited an increased risk of natural disasters, including forest fires, the effect of inflation on prices and rising reinsurance costs.

Tokyo Marine America Insurance Company and Trans Pacific Insurance Company said they will start sending non-renewal notices to customers starting July 1.

A spokesperson for Tokyo Marine America told the newspaper San Francisco Chronicle in a statement that it would continue to offer commercial insurance.

“Given the small segment of private lines business we write and rising costs, we cannot sustainably support personal lines coverage and have no intention of returning,” they said.

Rates have skyrocketed for many California homeowners.

Jeff Waack, the treasurer of a West Hollywood apartment, told DailyMail.com earlier this month how annual coverage for the building has increased 400 percent this year from about $23,000 to $116,000.

“Our management company sent proposals to 12 different insurance companies this year, and every one of them refused to give us a policy,” he said.

West Hollywood is an urban area and is not particularly at risk from wildfires, hurricanes or flooding, Jeff said.

Jeff Waack said he ‘almost fell off his chair’ when he saw how much insurance premiums had risen this year for a West Hollywood apartment building

Jeff said the West Hollywood building is not in an area at particular risk of wildfires, hurricanes or flooding

He has lived in the 54-unit building for decades and says the last claim he remembers was 18 years ago.

As a last resort, the condo was forced to take out coverage from a non-California licensed company, meaning it sells policies that are not backed by the state.

“I almost fell off my chair when I saw the award,” Jeff said. “It feels like they arbitrarily picked a number high enough to really benefit their bottom line. They know they got us and we have to go for it.”

For the U.S. as a whole, dire 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.

As premiums rise across the country, people living in some states are worse off than others.

According to predictions from insurance comparison platform Insurify, the typical annual premium will rise to $2,522 by the end of 2024

Like California, Florida’s home insurance crisis has intensified in recent years as costly natural disasters have made it difficult for insurers to maintain profitability in the state.

According to Redfin, 11 insurers have been liquidated due to the increasing risk of floods and storms.

Hurricane Ian caused $109.5 billion in damage in 2022. According to the National Oceanic and Atmospheric Administration (NOAA), this was the third costliest disaster to hit the US and the most destructive in Florida’s history.

About 70 percent of Florida homeowners said they had been affected by rising coverage costs or had been turned down by their insurer, according to Redfin questionnaire.

This is compared to 44.6 percent of homeowners nationwide.

And 11.9 percent of people in the Sunshine State planning to move next year cited rising insurance costs as a reason — roughly twice the national share of 6.2 percent.