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A few wildfires and Farmers Insurance heads for the exits!

OMG, what a bunch of pussies. Just because everybody else is leaving that POS state you need to join too? I expected more honestly.

I'm not mad, I'm just disappointed.

PS. Just amend you policies to exclude acts of god (wildfires) & the problem is solved.

Farmers Insurance is now cutting jobs after pulling products from California

About 2,400 employees, approximately 11% of its workforce, face layoffs

By Julia Malleck, Quartz Media

Aug 29, 2023

Farmers Insurance is laying off approximately 11% of its workforce in an effort to protect its “long-term profitability,” just one month after ending new insurance applications in California. About 2,400 employees were cut as part of its restructuring plan across its business, which includes home, car, and life insurance.

CEO Raul Vargas cited “existing conditions” in the insurance industry and “macroeconomic challenges” as motivating factors behind the layoffs. “We must carefully manage risk and prudently align our costs with our strategic plans for sustainable profitability,” Vargas said in a statement yesterday (Aug. 28).

The California-based company, a subsidiary of Zurich Insurance Group, is the second biggest home insurer in that state behind State Farm, according to 2022 data from the Insurance Information Institute, an industry trade group.

State Farm too reduced its headcount in recent months. According to Worker Adjustment and Retraining Notification (WARN) records, it has cut more than 750 employees across offices in Texas, Arizona, and Illinois in 2023.

Insurers are backing out of California and Florida due to disaster risks

Farmers and other insurers like Allstate and State Farm have begun to withdraw insurance offerings in some states to reduce their exposure to extreme weather events, which have become more frequent and destructive in a warming world. Inflation, which has exacerbated construction costs, has also made it more expensive for insurers to provide coverage in disaster-prone states.

California and Florida are two states where insurers have been making a marked retreat. Data from the National Centers for Environmental Information (NCEI) shows that just three disasters in California—drought, flooding, and wildfire—within the past year have caused between $5 billion and $10 billion in damages. In Florida, eight disasters in that same time frame—six severe storms and two tropical cyclones—have totaled between $100 billion and $200 billion in costs.

In July, Farmers announced it was ending home, auto, and umbrella coverage in Florida, just before the start of hurricane season. The move impacted 100,000 policyholders, according to CBS. Bankers Insurance also announced in July that it was dropping its home and fire insurance offerings in Florida, while Lexington Insurance said it was ending coverage for 8,000 of its customers in the Sunshine State, as Insurance Journal reported in March. At least six insurers declared insolvency in the state last year.

State Farm and Allstate have also pulled back coverage in California as wildfires blazed across swathes of the state. Allstate made the announcement (pdf) during its November earnings call, stating it would no longer offer new home, condo, or commercial insurance policies. State Farm announced in May that it would no longer accept new applications for property and casualty insurance citing, “historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market.”

One more thing: Some Americans are forgoing home insurance

Amid the mass departure of insurers and rising premiums, some homeowners opt to skip insurance altogether and hope for the best. About 12% of American homeowners lack property insurance, according to figures quoted in the Wall Street Journal. For those who do have a policy, about two thirds are actually underinsured, according to Nationwide, meaning the full value of their home is not factored into their policy.

The combination of climate change, rising costs, and retreating coverage means that even more Americans are risking financial precarity when investing in a home—should disaster strike.

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