State Farm Halts New Homeowners Insurance Applications in California Due to Rising Catastrophe Risks

State Farm General Insurance Company has made the decision to cease accepting new homeowners insurance applications in California, citing several key factors that have contributed to heightened risks. The company points to the “rapidly growing” threats posed by catastrophes like wildfires, significant increases in construction costs, and challenges in the reinsurance market.

In a released statement, the company emphasized its commitment to responsible risk management. Starting on the upcoming Saturday, State Farm will halt the acceptance of new business, particularly for personal lines property and casualty insurance applications. Importantly, this change will not impact personal auto insurance, and State Farm’s network of independent contractor agents will continue to serve their existing customers.

State Farm underlined its intention to collaborate with the California Department of Insurance and other relevant policymakers to address the conditions and challenges in California’s insurance landscape. However, the decision to suspend new homeowners insurance applications reflects the company’s dedication to strengthening its financial position in the face of evolving risks.

The insurance industry is continually adapting to changing circumstances, and State Farm’s action in response to the rising threats of wildfires and construction costs underscores the dynamic nature of risk management and the importance of protecting both insurers and policyholders in the face of mounting challenges.