California insurers have been curtailing their homeowners business as two of the largest insurers offering protection for luxury properties will end coverage for some clients.
This same month, American International Group AIG will begin notifying about 9,000 clients of its Private Clients Group that their home policies will not be renewed this year . The change is part of a plan by AIG to stop selling homeowners policies in California.
Otherwise a policy could cost between three and five times more than what AIG clients now pay, with less generous coverage, according to brokers.
- How many people will benefit from the increase in Social Security in California
- Walgreens closes 5 stores due to the wave of crime that hits the San Francisco metropolitan area
In an earnings call in October, Chubb CEO Evan Greenberg said the insurer’s drawdown in California was “not small” in places” both highly exposed and moderately exposed to wildfires.” He said that “someone else will have the pleasure of underwriting” business for which “we cannot charge an adequate price for the risk”.
In 100, the state department of insurance approved an average increase of 17.5% on the rates of AIG home policies. A subsequent request from AIG for an increase of 42% is still pending.
When purchasing policies with strictly regulated terms and conditions, Californians with homes estimated to cost more than $10 million dollars to rebuild they usually pay between $20,000 and $40,000 dollars in annual premiums, while those who have residences of $30 millions of dollars or more usually pay more than $100, 000 dollars, the brokers said.
You may be interested: