Mercury Insurance has announced they will partner with Tokio Marine America (TMA) and its subsidiary, Trans Pacific Insurance Company (TPIC), to help transition all their existing customers over as TMA moves out of the California personal insurance market.
TMA only offered personal lines insurance in California and the increased cost of information technology and overall business costs was not supported by the small amount of plans they covered, so TMA announced in April of 2023 they would be exiting the market.
California residents are struggling to find affordable home insurance, with wildfire risks and increasing home construction costs leading seven of the state’s largest homeowner’s insurance providers to restrict their business in the state, according to Bankrate. Insurers including State Farm, Allstate, USAA, and Farmers have all recently announced limits on the number of new policies they will write in California. As a result, state residents are left with fewer options and high costs.
California residents have been facing rising insurance costs and, in some cases, struggling to find insurance coverage, ABC reported. Christina Habib, a Rancho Cordova resident, said that when she opened her latest car insurance bill, “They were going to raise it more than double than what I was originally paying.” Her payment had increased from $136 per month to approximately $360 per month - an increase of more than $2,600 per year. "It is very hard. I depend on my car quite a bit," Habib said.
The Insurance Information Institute (III) said in a post that legal system abuses are threatening the affordability and availability of insurance. “Legal system abuse occurs when policyholders, plaintiff attorneys, or other third parties use fraudulent or unnecessary tactics in pursuing an insurance claim payout, increasing the time and cost of settling insurance claims,” III said. These practices can include seeking outsized payouts and filing meritless claims, which ultimately cause higher insurance costs for policyholders.