It is the largest home owner insurer in the state
State Farm’s homeowners insurance business has stopped accepting applications from within California, citing “necessary” actions to improve the company’s financial strength.
State Farm General Insurance Company is no longer accepting new applications, including all business and personal lines property and casualty coverage, effective May 27, the insurance giant said in a news update. Personal auto insurance is not affected by the move.
The carrier blamed historic increases in construction costs above inflation, “rapidly” growing catastrophe exposure, and a tough reinsurance market for the change.
“We take our responsibility to manage risk very seriously,” State Farm said in a news update. “We recognize the Governor’s administration, lawmakers, and the California Department of Insurance (CDI) for their efforts to reduce fire losses.”
State Farm said it is “committed to working closely” with policymakers and the California Department of Insurance (CDI) to help build capacity in the state’s insurance market.
“However, these actions must be taken now to improve the company’s financial strength,” State Farm said. “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 affected by this decision.”
State Farm is the largest homeowners insurance provider in the state, according to a ranking from the Insurance Information Institute (Triple-I).
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