February 23, 2022
AIG to Leave the Homeowners market in Marin – now What?
A major Exclusive Affluent Insurer is Leaving the Great State of California
What to do? Where to go?
What the AIG decision says to Marin County Homeowners
AIG to Exit California Homeowners Market:
In a stunning decision American International Group [AIG] has decided to leave “the admitted homeowners market on Jan. 31” in the state of California. The company will still exist in the surplus lines [nonadmitted] market. This unusual move is most likely due to the growing wildfire exposure and resulting claims in the state of California.
This statement pertains to Homeowners [Dwelling] policies in California, only. [That is at least our understanding.]
This should lead to AIG nonrenewals throughout California, including here in Marin, San Francisco, San Mateo, Contra Costa and other San Francisco Bay Area counties. There are strict regulations concerning these nonrenewals issued by the California Department of Insurance. Make sure you check and open your mail.
This announcement does not mean your insurance is cancelled but it does mean that its likely that your homeowners policy with them will be nonrenewed. This pertains to California only.
AIG is considered an Affluent Insurer. Their home insurance product was better than most.
Why AIG is Leaving the California Homeowners Insurance Market is Significant:
AIG offered one of the better policies available in the state up until the present time. For the past few years, the insurer had not been taking on any new clients. The market for so called Affluent Homeowners policies has now become even more exceptionally limited. Owners of homes valued over $1 Million dollars now have less choice.
With the loss of AIG the insurance market for high end homes looks just horrible in CA. Our humble opinion is that rates in this market have been going up for years but this will allow it to go up even more.
What to Do if you Get an AIG Nonrenewal:
Act fast. If you receive a nonrenewal from AIG move swiftly to contact your insruance agent and or broker. While it may be possible that an admitted insurer will take the property its also possible that the California FAIR or Nonadmitted Insurer may be in your best interest.
Shop around in the admitted market and discuss with a broker your best options. Often replacement policies for AIG clients can take longer as they Total Insurance Value of these structures if often far higher than average. Be prepared to provide a copy of your current policy to your exisiting or new broker agent.
The most important thing on your AIG nonrenewal is the date of the end of the policy. That nonrenewal date should coincide with the inception of the new homeowners policy.
What Does AIG’s Exit from the Home Insurance Market Mean for California?
This example is yet another instance of a California consumer property insurer leaving the state in recent years which means that the market is continuing to become harder. A harder market can only mean higher insurance premiums for all consumers in California that have homeowners insurance. Not getting an AIG nonrenewal could will still potentially change your premiums. The more insurers = the lower overall premiums. That is the general thinking.
There have been numerous insurers that have left the homeowners market in the past five years. This insurer however is one of the few affluent insurers to exit the California home market.
As with the rest of the state of California, Marin County will clearly be hit hard by this withdrawal. The market for home insurance in Marin was already pretty difficult, adding another X,000 or so policyholders will not help the community at all.
Get a Marin County Homeowners Insurance Estimate Now
About AIG Insurance:
American International Group is an international insurance conglomerate [alien in insurance parlance] that provides numerous forms and types of insurance including: personal and commercial property and liablity insurance as well as life insurance in various US states. The organization has both admitted and nonadmitted insurers that offer a full range of products. The AIG Private Client group is an elite level insurance option for “many of the most successful individuals across the U.S.” No more for California.
About Home Insurance:
Home Insurance or Homeowners insurance is a common form of insuring owner occupied dwellings. Industry terms such as HO3 and HO5 are commonly used to describe specific policy types. Home insurance usually includes coverages for the Main Structure, Other Structures, Personal Property, Loss of Use, and Personal Liability. Other coverages may be available. Homeowners insurance is typically limited to owners who occupy their property.
About the California Department of Insurance:
The California Department of Insurance is the main state regulatory bodily that overseas insurance companies in the US state of California. In the United States, insurance is mostly, but not always, regulated at the state level.
www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/aig-to-exit-california-homeowners-insurance-market-at-january-end-6851247
An April 2022 Update on AIG Leaving California:
Since the publication of this brief article, Marindependent has been contacted by an increasing quantity of consumers that have been dropped by AIG Private Client Services. It is most unfortunate. In some rare cases good solutions have been found. In many situations the solutions have beens sub par at best.
An additional note if you have not been nonrenewed by AIG home insurance and they do offer you insurance it may be in your best interest to pay the bill now and then review your coverages.
