State Farm to Offer Renewals to Policyholders Affected by L.A. Fires
Company Makes U-Turn on Non-Renewals Amid Outrage
State Farm said Wednesday that it will offer renewals to residential policyholders affected by the Los Angeles County fires that it had previously planned to drop.
Decision Applies to Majority of Policyholders
The decision applies to policies held by homeowners, owners of rental dwellings, and residential community associations, which include condominium associations. The figure includes roughly 70%, or 1,100, of the 1,626 residential policies still in place in Pacific Palisades’ primary 90272 ZIP code – and thousands more in the neighborhood and elsewhere in the county. The offer does not apply to policies that had already lapsed when the fire started on January 7.
Thousands of Policies Targeted for Non-Renewal
The Department of Insurance said that among the thousands of policies State Farm had targeted for non-renewal, more than 7,600 were in the Palisades fire zone. There were also 525 more in San Gabriel Valley’s Eaton fire and additional policyholders elsewhere. It’s unclear how many of those policies had already lapsed when the fires began.
Company’s Decision Due to Tragedy and Commitment to Helping Policyholders
“We are in the business of helping people recover, and that’s exactly what we’re doing right now to those impacted by the fires. It’s just such a horrible tragedy,” said Jon Farney, chief executive of State Farm Mutual Automobile Insurance Co., parent of State Farm General, its California subsidiary.
Farney’s Remarks
Farney made his remarks in an extended interview Tuesday before the insurer told The Times about the policy change.
State Farm’s Original Decision
State Farm said in March it would not renew roughly 30,000 homeowners, owners of rental dwellings, and other property insurance policies. It also said it would stop offering commercial policies to apartment owners and not renew roughly 42,000 of those policies in place. Renter’s policies that insure a tenant’s belongings were not affected.
Outrage and Call to Action from State Insurance Commissioner
State Insurance Commissioner Ricardo Lara had urged insurers last week to suspend pending non-renewals in the Palisades and Eaton fire zones. His spokesperson, Michael Soller, said the department was in talks with State Farm to get more details about the announcement.
Commissioner’s Moratorium Expanded
Lara also announced he had expanded the boundaries of a moratorium he issued last week that bars insurers from issuing new cancellation or non-renewal notices for one year. It applies whether or not homeowners have suffered a loss.
FAQs
Q: Will State Farm be offering renewals to policyholders affected by the LA fires?
A: Yes, State Farm will be offering renewals to residential policyholders affected by the LA fires that it had previously planned to drop.
Q: How many policies are affected?
A: The decision applies to roughly 70%, or 1,100, of the 1,626 residential policies still in place in Pacific Palisades’ primary 90272 ZIP code – and thousands more in the neighborhood and elsewhere in the county.
Q: What about policies that had already lapsed when the fire started?
A: The offer does not apply to policies that had already lapped when the fire started on January 7.
Q: What about policies with total losses?
A: State Farm spokesperson Bob Devereux said that policyholders in the fire zones would get one-year renewal offers, and those with total losses would get two renewals, as required by law.
Q: How many claims has State Farm received?
A: The company has received 6,300 residential and auto claims, making it the largest wildfire disaster State Farm has ever experienced.
Q: What is the estimated damage from the fires?
A: At least one estimate has put the damages at over $200 billion, which could exceed Hurricane Katrina and make it the most costly disaster in the nation’s history.
