UPDATE 06/02/2023 — Allstate and Farmers join State Farm in denying new homeowner policies in California. State Farm quit selling new homeowner policies on Saturday, and now a second major carrier, Allstate Insurance, has confirmed it ended new homeowners’ policies in the state last year. On top of that, ABC-7 News reported that Farmers Insurance is now limiting policies for new customers. All three companies are still serving existing customers, and more than 100 other companies are still issuing new homeowners’ policies, but homeowners across the state will have a tougher time buying coverage.
State Farm will no longer provide home insurance to new California customers because of wildfire risks and increased construction costs. The company quit accepting new applications for business and personal lines and casualty insurance in California, USA TODAY reported.
Building Cost Estimating, Construction, Outdoor Projects and Activities
State Farm said it will still work with the California Department of Insurance and lawmakers and will still serve existing customers.
The Oregonian reported that last year, California became the first state to require insurance premium discounts for those with wildfire protection safeguards at homes or businesses. That change was in response to soaring insurance costs for customers in high-risk areas.
“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,” the company said in a statement.
CNN reported that scientists and California officials blame the climate crisis for the intensity of fire seasons. About 25 percent of the state’s forestland burned in the last 10 years — more than triple the previous decade.
The factors behind Illinois-based State Farm’s move are beyond the agency’s control, Michael Soller with the California Department of Insurance said. State Farm, with its affiliates, is the largest provider of auto and home insurance in the U.S.
