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State Farm Stops Offering Property Insurance in California

State Farm General Insurance Company no longer accepts property and casualty insurance applications covering all business and personal property in California. The company made the announcement on Friday.

The company said the decision, effective May 27, is in response to “historic increases in construction costs that outpace inflation, rapidly increasing catastrophe risks, and a challenging reinsurance market.”

“We take our risk management responsibilities seriously,” a company spokeswoman said. “We salute the efforts of the governor’s administration, legislators and the California Department of Health to reduce the damage caused by wildfires. We are committed to working constructively with policymakers.”

In 2021, California Insurance Commissioner Ricardo Lara announced. new insurance coverage, Implemented for the summer wildlife season, it increases payments for wildfire survivors and evacuation allowances. Lara said the new protection means “more payouts for some claims and less paperwork from insurers.”

Last year, the Secretary enforced: new insurance price regulation under Improved safety with the Wildfires framework The law requires insurers to offer discounts to consumers who take safety measures, such as roof and window upgrades, to prevent wildfire hazards.

The flames burn down the Triangle Road house. An oak fire blazes in Mariposa County, California, Saturday, July 23, 2022. (AP Photo/Noah Berger)

The new regulations are aimed at reducing insurance costs and providing consumers with transparency in risk assessment.

“State Farm is committed to working constructively with the CDI and policymakers to help build California’s market capacity,” the firm said in a statement. “But we need to take these steps now to improve the company’s financial strength.”

Some 71.8 million homes will be at some degree of wildfire risk in 2022, according to one study, and that number is expected to rise 11% to 79.8 million over the next 30 years due to climate change. It has been. A report by the First Street Foundation.

The company added, “We will continue to evaluate our approach based on changing market conditions.” “State Farm independent contractors licensed and licensed in California will continue to serve existing customers for these products and will continue to serve new customers for products not affected by this decision. I will continue.”

This decision does not affect State Farm’s individual auto policy.

https://ktla.com/news/local-news/state-farm-to-stop-accepting-new-property-insurance-policies/ State Farm Stops Offering Property Insurance in California

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