Bay Area insurance agent alleges Farmers issued questionable cancellations: 'I want the truth out'

Stephanie Sierra Image
Wednesday, May 28, 2025
CA insurance agent alleges Farmers issued questionable cancellations
A Fremont-based agent asked Farmers why it sent letters to his clients claiming they requested to cancel their coverage - when he says they never did.

FREMONT, Calif. (KGO) -- As tens of thousands of California consumers get dropped by their insurance company, 7 On Your Side is investigating a new concern raised by a local Farmers Insurance agent -- what happens if you get a letter claiming you canceled your policy when you really didn't?

"Is this the new normal?" said Jeffrey Carvalho, a Fremont-based Farmers Insurance franchise owner. "They need to stop it."

While the company denies the allegations, Carvalho says he risked his job to share his side of the story about a problem he claims impacted hundreds of his clients across the Bay Area. That is, until 7 On Your Side's Stephanie Sierra and our team got involved.

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7 On Your Side continues to investigate claims of questionable practices in the insurance industry, including up to the state's top insurance boss, Commissioner Ricardo Lara. But these new allegations appear to highlight what Carvalho describes as -- repeated inaccurate cancellations.

"What Farmers is doing is putting 'policy cancellation - insured request,'" said Carvalho. "It's just not a good way of doing business."

Carvalho is a 37-year veteran of the industry who now wants out after what he says he witnessed this year.

"I have so many customers that have been so upset with Farmers because they decided to cancel the policy," said Carvalho.

According to emails shared with 7 On Your Side, Carvalho sent a letter and a slew of notes to upper management at Farmers raising his concerns. Specifically, he asked why the company is sending out letters to his clients claiming they requested to cancel their coverage - when he says they never did.

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Carvalho: "I said I don't understand, please explain to me why you would put 'policies canceled, insured request'... I have letters from the customers who said they did not request to cancel the policies... They said, 'oh, don't worry - pretty soon it's going to stop.'"
Sierra: "How many cases of that have you seen?"
Carvalho: "This whole stack right here... At least 1,000... They need to stop it."
Sierra: "Did you notice any similarities among the policyholders in that group?"
Carvalho: "They're elder, they're older, anybody in the ages of 65 and older..."
Sierra: "And when you're bringing this information to upper management at Farmers, what do they have to say?"
Carvalho: "Just excuses - 'This is what we're doing at this time'... It was supposed to end in 2024... it's still going on now."

For months, Carvalho says he repeatedly called Farmers' upper management to complain about the situation, saying his team had to literally "fight on the phone" to try and get their clients' coverage back, and resubmitting thousands of these documents to no avail.

"Have you seen any effort from Farmers to rectify those cases?" asked Sierra.

"No," said Carvalho.

That's when he called 7 On Your Side.

We reached out to Farmers to get answers, and received the following statement: "Customers can initiate changes to their policy for any number of reasons at any time and when they are made, customers receive a confirmation. Customers who have questions about their policy or any changes they may have received correspondence about are encouraged to connect with their agent or a customer service representative for assistance. Importantly, we can confirm that the alleged widespread activity described in your inquiry is not occurring and insured request cancellations are only processed when requested by the insured."

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Consumers have complained insurers rely on aerial footage of their homes to make renewal decisions -- and that the images can be inaccurate.

The company also encouraged customers with questions about their policy to connect with a Farmer's agent.

Carvalho says his clients have tried that for a year and got nowhere. However, he says now that's changed.

"After you reached out, Farmers changed the way they do business," said Carvalho. "We're grateful to ABC News, thank you for all your hard work and getting Farmers to take care of the agents and the customer."

Carvalho says Farmers never responded to the letter he sent to upper management, but only spoke to him over the phone.

The situation highlights an important reminder for anyone who's been dropped to check their denial letter. Carvalho says more often than not, there are errors that should be reported to your agent.

Take a look at more stories and videos by 7 On Your Side.

7OYS's consumer hotline is a free consumer mediation service for those in the San Francisco Bay Area. We assist individuals with consumer-related issues; we cannot assist on cases between businesses, or cases involving family law, criminal matters, landlord/tenant disputes, labor issues, or medical issues. Please review our FAQ here. As a part of our process in assisting you, it is necessary that we contact the company / agency you are writing about. If you do not wish us to contact them, please let us know right away, as it will affect our ability to work on your case. Due to the high volume of emails we receive, please allow 3-5 business days for a response.

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