State Farm General Insurance Company announced last week that it will stop accepting new homeowners insurance applications in California, citing “rapidly growing” catastrophe risks like wildfires, “historic increases” in construction costs and a challenging reinsurance market. Via CNBC.com:
“We take seriously our responsibility to manage risk,” the company said in a release.
State Farm said it will stop accepting new business, personal lines property and casualty insurance applications starting Saturday. The new policy will not impact personal auto insurance, according to the release. State Farm’s independent contractor agents will also continue to serve existing customers.
The company said it will work with the California Department of Insurance and other policymakers to improve conditions in California, but that State Farm decided to take action to improve its “financial strength.
There are dozens of companies writing homeowners policies in California, but if other companies follow State Farm’s example, homeowners will have to get policies through the state’s FAIR plan.
