Safeco to Stop Writing New Condo and Renter Policies in California

It appears another insurance carrier is turning sour on wildfire-prone California.

Safeco, a Liberty subsidiary, is preparing to stop writing new condo and rental policies in California at the beginning of next year. Liberty stopped writing new condo or rental customers under its parent brand in December 2023.

A spokesperson for the company described the changes as a new strategy to deal with a changing market in California and some underperforming lines.

“We regularly assess our position in every market to ensure we are meeting our customer needs and achieving our business goals,” reads a statement emailed by the spokesman. “During this time of increasing risk and volatility, we are building a sustainable business path forward in California by simplifying our product offerings and investing in the areas where we can win in the long term. This includes focusing our California business on core Safeco auto, home, landlord and umbrella products, while reducing our overall product offerings.”

According to the statement, the company is “simplifying and focusing” its product investments, as well as targeting core lines of business and reducing its menu of product offerings.

“We are committed to the California insurance market and believe our actions will provide a more sustainable path forward and fulfill our commitment to our agency partnersand customers,” according to the statement.

Under the new strategy the company has made the decision to discontinue several of its smaller lines of business and products in California over the next two years, many of which have underperformed over the past decade, according to the company.

The changes include:

• Starting Jan. 1, 2025, the company will stop writing new Safeco business for condo, renters and watercraft. The company is also discontinuing some specific home products written through a few of its many underwriting companies; however, the company will continue to write home insurance in California.
• Starting Jan. 1, 2026, the company will stop writing new Safeco business for specialty vehicles, motorcycle and non-good driver (standard) auto products.
• Starting Jan. 1, 2026, the company will begin the non-renewal process for all the products listed above, as well as Liberty Mutual Condo and Renters policies.

Several carriers have pulled back from writing in California, citing a growing number of wildfires and more sever wildfires in the state and regulations that have made it hard to raise rates.

In a reversal of this trend, Farmers Insurance said earlier in December it will resume offering coverage for multiple lines of insurance in California to new customers.

The lines include condominium, renters, umbrella, landlord, vacant and manufactured home. Many of the reopened coverage offerings had been temporarily paused for more than a year.

The company cited among its reasons for the decision regulatory steps taken by the state’s insurance commissioner and other stakeholders.

The changes to insurance regulations ongoing in the state are part of the so-called Sustainable Insurance Strategy intended to stabilize the California homeowners insurance market and address the insurance crisis.

Carriers began pulling back from the state’s homeowners market, blaming blamed wildfire losses as well as regulations. They also began requesting steep rate increases.

State Farm applied for large rate increases in California, a year after the carrier got rate approvals of 7% and 20%. The insurer, the largest in California, insures nearly one-in-five homes in the state. It recently requested a 30% rate increase for its homeowners line, a 52% rate increase for renters and 36% rate increase for condo coverage.

Related: California Insurance Commissioner: Allow Cat Modeling in Rates for Wildfires

Allstate, which stopped issuing new California homeowners insurance policies in 2022, is seeking an increase in its California homeowners insurance premiums by an average of 34%. It would be the largest rate increase this year and would impact more than 350,000 policyholders.