Commercial auto insurance policies are a lifeline for business owners. These policies protect your company’s vehicles and the drivers who use them. However, in recent times, numerous auto insurance providers have started pulling out of California. The state’s high-risk profile and litigious environment have made commercial auto insurance (CAI) premiums expensive, leading to insurance carriers leaving the market.
If your company relies heavily on commercial vehicles, you must be keenly interested in whether your current provider is pulling out of California. In this article, we will discuss what leads insurance companies to withdraw from the California market. We will also look at the effects of these movements on business owners and discuss options Mainline Insurance can assist with for migrating to new coverage.
What causes insurers to exit California’s insurance market?
There is no single reason that insurance companies are leaving the California market. Rather, it is a combination of factors, including increased claims, more expensive medical treatments, a higher number of claims with multiple beneficiaries, and more litigation.
California’s regulations and legal environment also play a significant role. In California, companies must deal with complicated and ever-changing laws, which add to the cost of doing business. In addition, juries award some of the highest payouts in the nation, making the insurance landscape problematic for insurance carriers who must cover these claims.
What should business owners do if their commercial auto insurance carrier pulls out of California?
If your commercial auto insurance carrier is departing from California, you will need to search for a new provider. It can be challenging to find affordable coverage in the state, and the cost of your new policy may be significantly higher. The best approach is to start your search early. Begin researching and contacting California-based insurers well before your current policy comes up for renewal. The earlier you start, the better your chance of securing affordable coverage.
You should also consider working with a broker or an independent agent. Insurance brokers, like Mainline Insurance, have access to a wide range of coverage options, including coverage from insurance companies that don’t operate in California. This can mean a great policy at an affordable price. Mainline Insurance has helped many clients, just like you, find a comprehensive policy that fits their budget.
Can you opt-out of California policies and buy from carriers that operate in other states?
This is, unfortunately, not an option. If your business operates in California, its vehicles must be insured under a CAI policy. Moreover, you must always carry coverage while your vehicle is registered in California, or you may face steep fines and penalties.
The departure of commercial auto insurance carriers from California is a cause for concern for countless business owners. Increased claims, expensive medical treatments, complex legal regulations, and high payouts all play a role in driving insurance companies away from the Golden State. However, it is still possible to find affordable coverage in California. Start by contacting us at Mainline Insurance today, and with these steps, you can keep your company’s wheels turning while keeping up with California’s strict auto insurance requirements.