California loses 2 more property insurers in growing crisis

Two more insurance companies are ending property insurance coverage in California, adding to the growing list of insurers fleeing the state in what has become an escalating crisis.

Tokio Marine America Insurance Co. and Trans Pacific Insurance Co., both owned by Japanese firm Tokio Marine Holdings Inc., filed notices to California’s Department of Insurance saying the companies would cease offering homeowners insurance and umbrella policies in the Golden State.

Homeowners in California are facing loss of insurance coverage and surging premiums as companies flee the state. Getty Images

The move will impact more than 12,500 policyholders, who can expect non-renewal letters starting July 1.

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“Given the small segment of personal lines business we write and escalating costs, we cannot sustainably support personal lines coverages and do not plan to return,” Tokio Marine Holdings said in an emailed statement to Bloomberg. “We remain committed to commercial lines in California – and across the country – and supporting our agents and customers with exceptional service through this transition.”

FOX Business reached out to Tokio Marine Holdings for comment.

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Property insurers are leaving California in what the state’s insurance commissioner says is “a real crisis.” iStock

The decision is the latest blow to California property owners, as insurance companies continue to raise rates for customers or discontinue coverage.

In 2022, insurance giant AllState paused its sales of new home insurance policies in California due to wildfires and higher costs of doing business in the state.

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State Farm followed suit last year, saying it would stop accepting new home insurance applications in California due to “historic” increases in construction costs and inflation.

A sign is posted in front of a State Farm insurance office on January 03, 2024 in Berkeley, California. State Farm announced on March 20 it would discontinue 72,000 insurance policies in the Golden State. Getty Images

After State Farm announced last month that it would cut 72,000 home and apartment policies in California because of inflation, regulatory costs and increasing risks from catastrophes, California’s insurance commissioner, Ricardo Lara, told KCRA, “This is a real crisis.”

According to KCRA, seven of the 12 largest insurance groups in California have either paused or restricted new homeowner policies in the past year.

FOX Business’ Chris Pandolfo and Kristine Parks contributed to this report.

Original article source: California loses 2 more property insurers in growing crisis