After speaking with her elected representatives, her home insurance company, and contacting the California Insurance Department, Susan still has no answers justifying why her Farmers home insurance premium jumped 83% this year. Instead, she sees California Insurance Commissioner Ricardo Lara making it easier for insurers to raise rates and applying less scrutiny onto the industry.
“Lara is doing this with the okay and approval from Newsom and our elected representatives,” she said. “It all makes me sick. These are our democratic people that are supposed to work for the working folk and that is just disgusting.”
Susan is a 69-year-old widow and part-time social worker who continues to work to pay the bills. Her social security and pension are very modest. She’s content in a small mint-green stucco house she bought in a short sale back in 2008 when the economy crashed. The 825-square-foot place was built in 1949. It’s got two bedrooms and one bath and has a big backyard with fruit trees and a vegetable garden and two palms, native plants and mulch out front.
When she bought her house, she went with Farmers because they were affordable but offered good coverage. But this year, she got a letter from Farmers informing her that her premium was going up from $715 a year to $1,314, an increase of 84%. She immediately called her Farmers agent.
“I told the agent that I haven’t had a claim in 14 years. The agent told me that the homes are older, needing repair now, have water damage. Costs are going up you know, and you gotta help pay for all the other homes of folks who have been damaged by fire.” Susan understands that costs do rise and is okay with helping communities destroyed by wildfire, but not by paying almost double her previous premium. “I am okay with a 10 or 20% increase, but not 83%.”
Susan called Farmers corporate next. “They didn’t say much other than we were given the okay to raise rates by California representatives and the Insurance Commissioner. And I said, by almost 100%? Isn’t that poor business practice, just because you can, you are gouging people? And they didn’t say anything.”
In fact, Susan has never had a major problem in her house and, so far, the pipes are in good working order. She’s replaced a few faucets and rubber washers and that’s it. “This house has good bones,” she said. Her wildfire risk score is a zero, according to her Farmers policy, so wildfire risk is not a factor in her increase.
Susan contacted staffers in the offices of her elected state representatives. “Staffers said look, the bottom line is we gotta play ball with these guys and go along. If not, everybody’s gonna bail and we are not going to have anyone to insure our houses. And I said, really? We are like the biggest market for home insurance companies so why would everyone just bail?”
Then she filed a complaint with the California Department of Insurance. The Department sent her a letter saying they would get in touch with Farmers to follow up with her about her rate hike. “Then I got a letter from Farmers stating not much other than they were given permission for three rate hikes in 2023 by our wonderful state. Costs are going up.” The Farmers letter was copied to the Department of Insurance. “That was the last I heard from the California Department of Insurance. I also called the ombudsman’s office at the Department a few times, no response.”
Susan said from what she could see, the huge premium hike wasn’t justified. Farmers increased her dwelling coverage to replace or rebuild her home from $230,000 to $244,000. Her personal property coverage was increased only by about $5,000, and her separate structures coverage rose only $700. Her personal liability and medical payments coverage stayed the same while her loss of use coverage rose only $2,800. “Farmers upped a little bit on coverage but not to justify the nearly doubling of the premium,” said Susan. “This is just out of principle wrong, it is immoral.”
