Here are 17 activities State Farm considers too risky to insure under one California policy
They all have the dubious honor of being considered too risky to insure under a State Farm policy that offers extra liability coverage, per a filing earlier this year.
The underwriting guidelines apply to the embattled insurer's California Personal Liability Umbrella Program, a product for policyholders who want protection beyond what's included in a basic personal liability policy. It provides a minimum of $1 million for covered claims, which could include liabilities like steep attorney's fees, damages from a lawsuit, or medical bills for someone the policyholder injured.
State Farm requested a 39% rate hike for the product earlier this year, citing the need to offset rising claim costs stemming from 'more accidents, escalating medical bills and larger legal settlements,' a company spokesperson said at the time. State regulators have yet to decide whether to approve the hike.
That request is separate from State Farm's home insurance rate increases; the company received approval from state regulators in May to temporarily increase rates by an average of 17% and is still pursuing a permanent 30% rate hike, which would add an additional 11%.
State Farm stopped accepting new applications for the umbrella policy in California two years ago, according to the filing. But for customers considering renewing their coverage, State Farm's underwriting guidelines include a laundry list of disqualifying activities or characteristics.
Some might not raise any eyebrows — applicants with prior fraud convictions are barred, for example — but other restrictions are more esoteric, like farms that offer Pick-Your-Own produce.
Here's a selection of the sometimes eclectic list of traits and activities State Farm considers 'unacceptable':
Highly specific underwriting guidelines for personal liability umbrella policies is not a new phenomenon, though insurers sometimes add new ineligibilities if they deem activities to have become riskier over time, said Janet Ruiz, a spokesperson for the Insurance Information Institute. She declined to comment specifically on State Farm's guidelines.
Premiums for umbrella policies have increased in recent years in part due to rising medical costs, more lawsuits and occasional 'astronomical verdicts' in some legal cases, Ruiz said. She still recommends umbrella policies, especially for people with significant assets, but she is also hoping for tort reform to reign in rising legal payouts.
'It's an important balance,' Ruiz said. 'People should get paid for the damages, but when they get excessive amounts, we all pay for it, in the cost but also some of the exclusions.'
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