State Farm will no longer offer home insurance to new customers in California, citing «historic» increases in construction costs and «rapidly growing catastrophic exposure.»
Starting Saturday, State Farm General Insurance Company will stop accepting new applications, including all commercial and personal lines of property and casualty insurance, the company said in a statement. Press release.
The changes do not affect personal auto insurance.
The company said «historic increases in construction costs are outpacing inflation, rapidly growing catastrophe exposure and a challenging reinsurance market» were the reasons behind the policy change.
His announcement comes after a series of wildfires in the state last year. There were 7,490 fires in the state in 2022, a drop of 256 from the five-year average of 7,746, according to a December 1, 2022 article by CalMatters.
State Farm said in its statement that it recognizes government officials and the California Department of Insurance (CDI) for their wildfire loss mitigation efforts.
«We take our responsibility to manage risk seriously,» the company said. «We are committed to working constructively with the CDI and lawmakers to help build market capacity in California. However, these steps need to be taken now to improve the company’s financial strength.»
«We will continue to evaluate our approach based on changing market conditions,» State Farm said.