# State Farm Freezes CA Homeowners 

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State Farm Group's decision to stop writing new homeowners insurance in California likely heralds a series of withdrawals by insurers, according to an industry group, although State Farm itself is uncertain as to what exactly drove up costs in the state. 

"We're facing some pretty severe challenges here," said Bill Sirola, spokesman for State Farm's California operation. "We've been seeing increasing losses over the last two years, but we're not sure why." 

Sirola said the California homeowners market has been fairly stable for many years. Earthquake risk is mitigated by the California Earthquake Authority, a state-created insurer that backs up the industry with funds contributed by homeowners insurers. "Earthquake is not the issue," said Sirola. "We're just looking at a broad range of factors.

Sources:
- Property and Casualty.com (http://www.propertyandcasualty.com/content/news/article.asp?DocID={37F4C425-56BE-11D6-A789-00D0B7694F32}&Bucket=Current+Headlines)