(Helicopter dumping water on forest fire)
Palm Springs, CA
State Farm announced Friday they will no longer be writing new policies to insure homes in California. This is due to the fact of heavy wildfire risks and higher construction costs according to the company. In a news release, the insurance giant explained writing:
“State Farm General Insurance Company®, State Farm’s provider of homeowners insurance in California, will cease accepting new applications including all business and personal lines property and casualty insurance, effective May 27, 2023. This decision does not impact personal auto insurance. State Farm General Insurance Company made this decision due to historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market.
We take seriously our responsibility to manage risk. 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. We will continue to evaluate our approach based on changing market conditions. State Farm® independent contractor agents licensed and authorized in California will continue to serve existing customers for these products and new customers for products not impacted by this decision.”
For now, other insurance policies in California are staying the same, with new auto insurance and life insurance policies still being written.
California based State Farm Agent Keir Jones located in both Palm Springs and Long Beach explained the situation saying:
“The news that State Farm is stopping writing all new fire policies in California was announced Friday, leading to many calls and e-mails this weekend with questions. The decision doesn’t impact current State Farm policies and was made to protect policyholders. State Farm is still writing new Auto, Health and Life Insurance policies in California”