State Farm to stop offering home, property insurance to Californians
In a statement released on Friday, State Farm announced that they will no longer be accepting new applications for home or property insurance in the state of California, citing a number of factors.
"State Farm General Insurance Company made this decision due to historic increases in construction costs outpacing inflation, rapidly growing catastrophic exposure, and a challenging reinsurance market."
The decision will not affect customers who are already insured by the company, who noted that the decision went into effect on Saturday.
Auto insurance customers will still be able to apply.
"We take seriously our responsibility to manage risk," the statement said. "We recognize the Governor's administration, legislators, and the California Department of Insurance (CDI) for their wildfire loss mitigation efforts. We pledge to work constructively with the CDI and policymakers to help build market capacity in California. However, it's necessary to take these actions now to improve the company's financial strength."
In 2021, California experienced at least 7,396 wildfires, which burned nearly 2.6 million acres of land, according to the California Department of Forestry and Fire Protection. In 2022, the state experienced 7,490 wildfires that burned 362,455 acres.
State Farm, which was the largest property and casualty insurer in California in 2021, brought in over $7 billion of premiums, but operated at a loss of $4 billion, state data shows.
According to the California Department of Insurance, insurance companies covering property may be required to cover living expenses such as emergency shelter and food, personal property and valuables, damages to the property and other buildings or structures on it, the removal of trees, shrubs and debris, and water damage not caused by a flood.
