State Farm to stop selling new homeowners, business property insurance in California amid soaring costs

BLOOMINGTON (25News Now) - State Farm is no longer selling new property and casualty insurance policies for California homeowners and businesses amid increasing exposure to wildfires and soaring construction costs.

The action does not change existing homeowners or business customers in California, nor does it impact personal auto insurance policies there.

“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 Bloomington-based company said in a statement released late last week.

“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,” the company said.

State Farm reported in February that it suffered record underwriting losses of $13.2 billion.

The company said State Farm agents in California will continue to serve existing customers.

“We will continue to evaluate our approach based on changing market conditions.” the company said.

Copyright 2023 WEEK. All rights reserved.