Thousands of Calif. Policyholders Losing Fire Insurance

(TNS) – A major insurer’s subsidiary is discontinuing its fire insurance line in California — for an odd reason.

Liberty Mutual Fire Insurance Company, one of Liberty Mutual’s California subsidiaries, is in the process of non-renewing its approximately 17,000 dwelling fire policyholders in the state. The nonrenewals will last through November, after starting in September, according to filings with the California Department of Insurance.

The company is retiring the “antiquated” technology it uses to manage the dwelling fire policies, “and it is not feasible to create a new system to support this product in California,” Liberty Mutual wrote in its filing.

Dwelling fire insurance offers limited coverage compared to a typical homeowners policy. Its primary purpose is to cover fire damage to the structure of the home itself, rather than the belongings inside, for people who don’t live in their homes full time — such as landlords or vacation homeowners.

The technology is being retired across the company, affecting Liberty Mutual Fire Insurance Co. fire dwelling policies in multiple states, a company spokesperson said.

It’s an example of how some California property owners are losing their insurance for reasons completely unrelated to the state’s insurance crisis. One affected property owner in San Francisco told the Chronicle it was “sort of like a boyfriend who breaks up with you and can’t really tell you why.”

Liberty Mutual is the seventh largest property and casualty insurer in California overall, representing about 4% of the total market and 9.8 percent of the fire insurance market through its several subsidiaries as of 2023.

The non-renewed policies represent approximately 1% of Liberty Mutual’s total personal insurance policies in California and less than 2 percent of the total fire insurance market, according to the company and data from the Department of Insurance.

Liberty Mutual is still offering dwelling fire insurance policies in California through its Safeco brand, according to the company spokesperson. Liberty Mutual Fire Insurance Company policyholders were not immediately offered a new policy under Safeco.

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