State Farm Quits Selling Home Policies in California (Claims Pages Staff)

State Farm Quits Selling Home Policies in California

  Wednesday, May 31st, 2023 Source: Claims Pages Staff

State Farm, the largest home and auto insurer in the U.S., announced on Friday its decision to cease new home insurance sales in California, citing concerns over escalating wildfire risks and soaring construction costs. In an official media release, State Farm confirmed its withdrawal from the California home insurance market and halted the acceptance of new business and personal applications as of May 27.

The insurance giant attributed its choice to a combination of factors. "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," stated the company in a press release.

Over the past five years, California has witnessed an average of more than 7,000 wildfires annually, consuming an average of over 2 million acres, as per data from the governor’s office. Scientists and state authorities attribute the intensification of fire seasons to the climate crisis.

While prioritizing its financial goals, State Farm has expressed its continued commitment to collaborating with legislators and the California Department of Insurance, aiming to contribute towards the growth of the state’s market capacity.

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