Major insurer Liberty Mutual is eliminating all of its condo policies in California, it has announced.
The company, the fourth-largest home insurer in the state, has told regulators it will stop offering new condo and renter policies next year.
Existing policyholders will then see their coverage expire in 2026, according to filings with the California Department of Insurance.
“In this time of increasing risk and volatility, we are building a sustainable business path forward in California by simplifying our product offerings and investing in the areas where we can win long-term,” a spokesperson told the newspaper. San Francisco Chronicle.
It comes as several major insurers have fled the state due to worsening climate disasters, leaving many people struggling to find cover for their homes.
More than half of Californians said earlier this year that they had been hit by rising property coverage premiums or had been dropped entirely by their insurer.
Wildfires are becoming increasingly common in California and have burned more than 1 million acres of land so far this year.
According to the San Francisco Chronicle, Liberty Mutual currently insures just under 67,500 apartments and approximately 102,200 rental properties under the Liberty Mutual and Safeco brands.
The company, the fourth-largest home insurer in the state, has told state regulators that it will stop offering new condo and renter policies next year.
According to the outlet, the insurer covered 6.75 percent of California’s home insurance market in 2023, but has not written any new Liberty Mutual-branded condo and rental policies since December 2023.
In August, the company also said it was terminating its fire home insurance for about 17,000 policyholders in the state.
However, instead of blaming the losses, Liberty Mutual said technology issues were the reason for the non-renewals.
The company said it is discontinuing the “outdated” technology it uses to administer the policy, “and it is not feasible to create a new system to support this product in California.”
Home fire insurance is different than a typical homeowners policy. The primary purpose of coverage is to cover fire damage to the structure of a home itself, and not to the property contained within.
Home fire policies are often purchased by people who do not live in their home full-time, such as landlords or vacation home owners.
In the latest state filings regarding condo and tenant policies, Liberty Mutual said it expects its agents to help affected customers find new coverage.
All existing customers will continue to be covered until at least January 2026, it added.
Several major insurers have fled the state due to worsening climate disasters, leaving many people struggling to find coverage for their homes (photo: the Franklin Fire in Malibu earlier this month)
Documents show that Liberty Mutual currently insures just under 67,500 apartments and approximately 102,200 rental properties under the Liberty Mutual and Safeco brands
The typical annual premium for Americans will rise to $2,522 by the end of this year, according to predictions from insurance comparison platform Insurify
It comes as state regulators are pushing through reforms to help stabilize the insurance market, which many fear has entered a crisis.
As large companies like State Farm have cut back on state funding, this has led to a lack of competition.
Labor shortages and higher home repair costs have also driven up prices for homeowners in the state.
And some Americans who couldn’t find coverage have been forced to purchase the expensive FAIR plan, California’s insurer of last resort.
This month, California Insurance Commissioner Ricardo Lara announced that the state will allow insurers to justify rate increases based on the growing threat of climate change, a longstanding industry demand, The Mercury News reported.
In return, companies should look to expand coverage in parts of the state with the greatest wildfire risk.
Farmers Insurance announced earlier this month that it would increase the number of California homeowners policies it writes each month, saying the market has “improved.”
However, consumer advocates are concerned that the new regulations could result in many policyholders seeing sharp interest rate increases, the newspaper said.