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Major home insurer is hiking premiums by over 15% in California, as thousands lose coverage entirely
One of the largest insurers in California is raising premiums by an average of 15.3 percent for hundreds of thousands of homeowners starting next month.
Some 320,000 Californians who have taken out specific policies with Travelers Insurance - the sixth largest property insurer in the state as of 2022 - will be affected from June 24.
Thousands of others are also losing coverage due to wildfire risk, according to filings with the California Department of Insurance.
Travelers is the latest insurer to make changes to its business in the state.
A growing list of companies have limited or even stopped doing business entirely in the Golden State - many citing the intensifying risk of climate disasters.
Some 320,000 Californians who have taken out specific policies with Travelers Insurance - the sixth largest property insurer in the state as of 2022 - will be affected from June 24
As a result, over half of Californians say they have been affected by rising premiums for property coverage or have been dropped by their insurer in the last year, according to stark data from Redfin earlier this year.
Travelers Insurance was approved to raise rates for its Quantum Home 2.0 program, the San Francisco Chronicle reported.
It is a policy which the company began offering in 2018 which provides coverage to home and condo owners, tenants and landlords - and replaced the Quantum Home and Homesaver programs.
Some of the around 320,000 policyholders who will be affected will see their rates rise up to 26.7 percent, while others may see their premiums decline as much as 8.6 percent, according to data in the filings.
Since 2022, Travelers has not renewed thousands of policies that were grandfathered in before the switch to Quantum Home 2.0 which do not meet the company's current underwriting standards, the outlet reported.
In a court filing from 2022, Travelers proposed 5,236 policies across California which would not be renewed.
And in a most recent filing from April last year, it planned to drop another 1,389 policies which were at the most extreme wildfire risk.
'The consecutive years of wildfire losses and increasing number of acres burned across the state have challenged our view of risk and require us to implement adjustments to allow us to be viable in the market,' the company said in the filing.
'In addition, it is critical to the success of our business that we reduce our exposure to wildfire catastrophic losses, and as such we are in the process of non-renewing ineligible homeowner and landlord policies.'
It comes weeks after two insurers fled California - meaning thousands more people would lose their home insurance this year.
A growing list of companies have limited or even stopped doing business entirely in the Golden State - many citing the intensifying risk of climate disasters (Pictured: Blue Ridge Fire in 2020)
Tokio Marine America Insurance Company and Trans Pacific Insurance Company filed notices to the California Department of Insurance in April saying they would stop offering homeowners coverage and umbrella policies starting on July 1.
Both companies, owned by Japanese firm Tokio Marine Holdings, together insured 12,556 homeowners in the state, worth $11.3 million in premiums, according to company filings.
Insurers pulling out of states cuts down on competition, while labor shortages and higher fees for home repairs are also pushing up prices.
Some 51 percent of homeowners in the Golden State say they have been affected by a worsening home insurance crisis, according to a survey from Redfin last month.
Jeff Waack, the board treasurer for a condo in West Hollywood, told DailyMail.com earlier this year how the annual cover for the building has increased 400 percent this year from approximately $23,000 to $116,000.
'Our management company sent out proposals to 12 different insurance companies this year and every single one declined to give us a policy,' he said.
Jeff Waack said he 'nearly fell of his chair' when he saw how much the insurance premium had risen this year for a West Hollywood condo building
The typical annual premium will rise to $2,522 by the end of 2024, according to predictions from insurance comparison platform Insurify
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 for 72,000 homes - after previously saying it would also not take on any new applications for coverage.
The company cited an increased risk of natural disasters including wildfires, the effect of inflation on prices and rising reinsurance costs.
Across the US as a whole, grim 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.