The Oklahoma Insurance Department said that approximately 1,300 policyholders in the eastern half of the state will need to find a new insurance company to cover their homes.
On Monday, officials told FOX 25 that Farmers Insurance will not renew the homeowners’ policies over wildfire risk. Starting November 1st, Farmers Insurance will begin canceling policy renewals for the affected homeowners. However, existing policies will remain valid until their scheduled renewal dates.
Oklahoma Insurance Commissioner Glen Mulready said that he has not seen an insurance company take such action in the five and a half years he’s been in office. C currently, 113 companies offer homeowners policies in Oklahoma.
The news comes shortly after Farmers lifted its temporary moratorium on writing new commercial automobile insurance policies in the state of California on August 1st.
Eric Coleman, President of Business Insurance at Farmers, said at the time: “As a leading insurer of small businesses, we are excited to be re-opening these key lines of our commercial insurance offerings to new customers in California and help provide business owners with more choices when shopping for coverage options.”
Ten major insurers withdrew services or announced their exit from California, leaving hundreds of thousands of customers without insurance options in the face of increasing threats from natural catastrophes in the past 12 months.
Mulready is urging those who have been affected to get new coverage. He told local press.
“We’re not seeing this from other companies. I mean, everyone is adjusting to… the losses and the weather that we’ve been having. Again, not just Oklahoma but across the country. You know, there’s some real problems with… property insurance and specifically homeowners.”
According to Mulready, Farmers Insurance is the second largest provider of homeowners insurance in Oklahoma. Despite this, the company’s decision to drop policies will affect less than 2% of its home insurance business in the state.
Mulready clarified that this move is a strategic decision by Farmers to reduce its exposure to wildfire risk, rather than a response to an actual increase in wildfire danger.
Andy James, a fire management official, confirmed that there hasn’t been a notable rise in wildfire risk in the eastern part of Oklahoma in the past year.Mulready added: “We don’t have an availability problem. Now, you could argue we do have an affordability problem right, as costs to replace a home and insurance costs continue to go up. But we don’t have an availability problem. We have a lot of competition out there.”
Source: FOX25
