Farmers Eliminating Homeowners Insurance Policy Cap in California

Farmers Insurance announced it will eliminate the cap on the number of homeowners insurance policies it offers in California.

The move is part of a new filing, and the cap removal is effective immediately, made in anticipation of an improved homeowners insurance market in California, according to the carrier. Farmers homeowners offerings had been capped at 9,500 new policies per month.

The filing requests a 6.99% average statewide rate increase.

Farmers says the improved conditions are due to the adoption of the state’s Sustainable Insurance Strategy, pushed by California Insurance Commissioner Ricardo Lara.

This cap removal includes homeowners, condominium and renters policies.

Farmers also filed a new rating plan that incorporates elements of the Sustainable Insurance Strategy and is expected to add at least several thousand new policies in areas identified as distressed by the California Department of Insurance. In early 2026, Farmers plans to begin marketing directly to roughly 300,000 consumers in the distressed areas.

The Sustainable Insurance Strategy is intended to keep carriers from continuing to withdraw from the wildfire-prone state. In return to expedited rate filings, carriers agreed to write insurance in areas of the state that were shunned due to higher wildfire hazards.

Not everyone is happy with the deal.

A few of the victims of the Los Angeles wildfires in January are asking California Gov. Gavin Newsom to call for the resignation of Lara over some of the reforms.

The calls for Lara’s resignation follow a New York Times article that an agreement between Lara and several insurers enabled carriers to drop tens of thousands of policyholders ahead of the L.A. fires.

According to the article, Lara in 2023 struck a deal with insurers that enabled them to drop policyholders in exchange for future rate hikes, but it was billed as a way to keep people out of the California FAIR Plan.

Consumer advocates say Lara’s deal essentially made him the “industry’s business partner.”

Topics California Agribusiness Homeowners

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