Farmers Direct Is Latest Insurer To Leave California Market

The Farmers subsidiary has begun to send non-renewal notices in California, adding to the growing list of insurers exiting the market.

A toy car with an umbrella over it, indicating car insurance.
(Image credit: Getty Images)

Farmers Direct Property and Casualty Insurance, a subsidiary of Farmers Insurance, is the latest insurer to stop offering insurance in California.

Farmers Direct, which provides home, renters and auto policies, recently filed a notice with the California Department of Insurance to withdraw operations in the state, according to a November 7 San Francisco Chronicle report. The company will continue service for existing policies but has begun to send nonrenewal notices, the Chronicle reported. 

A Farmers spokesperson said in an emailed statement to Kiplinger that Farmers Insurance is not exiting the California market entirely. The move is "an effort to strengthen our ability to serve California customers," the spokesperson said, adding that Farmers Direct represents about 2% of its overall business in the state.

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"For the vast majority of affected customers, we will provide an offer to transition them to a different Farmers insurer," the spokesperson said. "Importantly, this action does not impact 98% of Farmers California property and casualty insurance policies issued by Farmers entities, including Bristol West, 21st Century and Foremost."

Customers are encouraged to contact Farmers with questions or concerns, the spokesperson added.

Earlier this month, four Kemper subsidiaries — Merastar Insurance, Unitrin Auto and Home Insurance, Unitrin Direct Property and Casualty and Kemper Independence Insurance — said they would no longer renew preferred home and auto policies in the state. That was preceded by similar announcements from Allstate in June, and State Farm in May.

The insurers often cited California’s growing climate-related risks, such as wildfires and floods, as their reason for leaving. 

In response to the increase in non-renewal notices impacting California residents, the California Department of Insurance recently released 10 tips for finding residential insurance, including a request to file a complaint if you think your non-renewal was unfair and a list of other providers to consider.

If you’ve been impacted by an insurer leaving your market, there are steps you can take to find insurance in disaster-prone regions. These include, for example, checking to see if you are eligible for a state-run insurance program.

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Joey Solitro

Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.