Another home insurance company to pull back from California, 36,475 homes affected

Another insurer has decided to exit the home insurance business in California.

Texas-based American National Group notified the California Department of Insurance on March 26 that it would no longer provide home insurance in California, leaving 36,475 homeowners (as of last December) without coverage, according to a recent report by Yahoo Finance. American National services 2.8% of California’s home insurance market.

American National Group stated it plans to cancel homeowners insurance services in eight other states as insurance disruptions in California and Florida escalate.

“This action is driven by serious and ongoing profitability challenges in the homeowners’ insurance market,” an American National Group spokesperson said in a statement, citing rising costs due to inflationary pressures, increased frequency of claims, and heightened competition.

Hartford, which accounts for 2% of California’s homeowners’ insurance market, stopped accepting new policies on February 1, and State Farm announced on March 20 that it would stop insuring about 72,000 homes and apartments starting in July. State Farm owns 20.6% of California’s insurance market share.

The exodus of insurance companies from the California market began in 2022 when Allstate announced in November that it would cease selling new policies for California homes. State Farm followed suit in May 2023 by ceasing to issue new insurance policies, while USAA announced a similar plan in August of the same year.

As of 2022, Allstate and USAA each accounted for 6.4% and 5.5%, respectively, of California homeowners’ insurance market share.

BY NAKI PARK, HOONSIK WOO  [park.naki@koreadaily.com]