Bay Area zip codes are at the top of the list

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State Farm, California’s largest insurer, has disclosed state zip codes where it will discontinue homeowners insurance coverage, with Bay Area counties topping the list.
1,703 of the 3,115 State Farm policies — nearly 55% — will not be continued.
Zip code 95033 in Santa Clara/Santa Cruz County also has more than 1,000 policyholders that will be dropped.
“We moved here from Pleasanton and we had State Farm there for many years,” he said.
State Farm blames an increased risk of catastrophes wildfires, outdated regulations, and higher costs as reasons it won’t renew the policies.
The company said the discontinued policies this summer account for just over 2% of its California policies.
State Farm says it will begin sending out notices to homeowners on July 3rd, but they point out that non-renewal is not a cancellation.
Susman says that should attract insurers back to the market, allowing them to assess risk on more factors than just a zip code.


Bay Area counties are at the top of the list of state zip codes where State Farm, the biggest insurance company in California, will no longer offer homeowners insurance coverage.

The Illinois-based insurer declared last month that, nine months after declaring it would no longer be issuing new home policies in the state, it would stop providing coverage for 72,000 homes and apartments in California as of this summer.

Approximately 65 percent of policies will be terminating in the Santa Cruz mountains’ 95033 zip code. And almost 48% in 95409, which is close to Santa Rosa. The little city of Orinda in Contra Costa County, however, has the highest number of non-renewed policies in the entire state. Roughly 55% of the 3,115 State Farm policies, or 1,703 policies, will not be renewed. Additionally, the 956 policies in the nearby 94549 will not be renewed.

According to Tom Stack, an Orinda-based real estate agent with Coldwell Banker, “the changes are coming faster than the very fire everyone’s worried about.”. He advised people to check for coverage prior to beginning their house hunt in the area because he claimed that it has become increasingly difficult to find home insurance in the town.

People are offended, disgusted, and upset, and the common refrain is, “I’ve never had a claim! I’ve had ’em 20, 30 years!” according to Stack. “I understand this to some extent because there is some reality to it. However, the pendulum has become paralyzed because it has swung so far in one direction. It has only recently come to a complete stop. It actually becomes problematic when the major players depart. “.

There are more than 1,000 policies that have been discontinued in Los Angeles County at zip codes 90272, 90049, and 91302, which are listed after each other. Additionally, over 1,000 policyholders in Santa Clara/Santa Cruz County’s zip code 95033 will lose their coverage. Approximately 1,400 policies in Santa Rosa and surrounding communities east were not renewed, making Sonoma County zip codes 95409 and 95404 complete the top ten.

The charming and opulent homes that line Caballo Ranchero Drive in the small township of Diablo, close to Danville. Ron Aghazarian, however, received a surprise from State Farm when he moved there.

He remarked, “We moved here from Pleasanton, where we had State Farm for many years.”. “We assumed that the policy would automatically renew to cover this house when we bought it. And they said they wouldn’t provide insurance in this area. In this domain, they were not formulating policies. “.

The 94528 zip code is where he resides. 152 State Farm policy holders in the area will receive notice that their insurance will not be renewed in July, more than half of them. In an interview with CBS Bay Area, insurance broker Karl Susman explained the reasons behind this.

“For some reason, State Farm kept writing even though the market was tightening and many insurance companies were stopping new coverage altogether,” the man stated. Furthermore, they were writing in places where the majority of carriers would never have written. We were therefore a little confused about what the next step or strategy was in that situation. It doesn’t really surprise us, then, that State Farm is the first to begin selling non-renewing homes in areas with fire risks that are above average. ****.

State Farm argues that it won’t renew the policies due to higher costs, out-of-date regulations, and an increased risk of disasters like wildfires.

Because of inflation, a difficult reinsurance market, and “rapidly growing catastrophe exposure,” State Farm announced last summer that it would no longer be accepting applications for all business and personal lines of property and casualty insurance. ****.

Slightly more than 2 percent of the company’s California policies, it said, are the policies that were canceled this summer.

State Farm notes that non-renewal is not a cancellation and that it will start notifying homeowners on July 3. Until their current contracts expire, policyholders will continue to be covered.

Losing insurance may force a person to enlist in the state’s insurer of last resort, the California FAIR Plan. Not only is the program pricey, but according to Susman, there are now so many applicants that it can take weeks to receive a quote. Furthermore, the plan operators warn that a single large wildfire could wipe out the entire enterprise. For homeowners in high-risk areas, there are just not enough good options available.

I’m not being cruel when I say that they have few options; some may not even have any at all. Susman stated, “If they’re too big for the California FAIR Plan, they’ll need to speak with a broker to try to obtain a policy that might be through Lloyds of London.”. “It’s outrageous that we might be facing premiums of up to $50,000 annually, but that’s the kind of thing you anticipate when there is no competition, right?”.

That being said, he did say that there might be hope. Insurers are currently prohibited from pricing policies on a per-home basis; however, the state is seeking to change regulations to permit this practice. With the ability to evaluate risk based on more criteria than just a zip code, Susman claims that should entice insurers to return to the market.

This report was made possible by Carlos Castaneda.

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