State Farm Decline To Renew Policy

The California homeowners’ insurance crisis reached another critical stage this week when State Farm General Insurance announced that it would not renew policies for 72,000 property owners across the state.

The insurance giant announced Wednesday that it would not renew homeowner insurance policies for 30,000 customers, including owners of condominiums. It also plans not to offer commercial apartment policies and won’t renew the 42,000 now in place.

Although the number of people affected is large, the company said the cuts represent less than 3% of its policies in the state. News of the cancellations did not sit well with the California Department of Insurance.

State Farm’s decision not to renew policies comes as thousands of Californians are finding it extremely difficult to insure their homes and commercial properties as companies increase rates, limit coverage or stop offering policies in areas increasingly susceptible to natural disasters.

The companies have cited high inflation, catastrophe exposure, reinsurance costs and the limitation of decades-old insurance regulations as reasons for scaling back policies in the state.

State Farm reported a net loss of $6.3 billion in 2023 compared to a net loss of $6.7 billion in 2022.