California-based King Insurance recently forwarded a notice to all of its producers, informing them that the company’s homeowners, renters and condo policies showing renewal effective dates of Aug. 8, 2002 and later would not be renewed The company said it would continue making available mobile home and mobile home park programs.
Steve Schwartz, King CEO, told Insurance Journal that, “The carrier made the decision primarily for three reasons?The first was the deterioration of loss ratios in the industry as a whole for that segment; the increase in mold litigation; and the inability to get a mold exclusion approved by the California Department of Insurance. I think this is a typical response that a large number of California insurance carriers are reacting to what is going on in California. The most interesting thing to watch will be what will happen if there is an inability of admitted markets to write insurance in California? Will the state allow the non-admitted markets that have a great deal more flexibility to issue a typical homeowners policy? It’s unfortunate that we are not able to adjust rates on a timely enough basis to compensate for what is going on in claims.”
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