State Farm says it’s no longer accepting homeowner insurance applications in California due to “historic increases in construction costs outpacing inflation” and “rapidly growing catastrophe exposure” to extreme weather events like wildfires.
Zoom in: State Farm was the top home insurance firm in the state before it ceased operations Saturday, per the Insurance Information Institute. The American International Group announced last year it was pulling policies in the state amid wildfire risk concerns.
- California Insurance Commissioner Ricardo Lara moved to protect homeowners by introducing insurance pricing regulations, including a one-year moratorium preventing homeowner insurance cancellations and non-renewals in some fire-affected counties.
Zoom out: It’s not just California. Some insurers pulled out of Louisiana and Florida last year after forecasters warned of “another active Atlantic hurricane season,” per Bloomberg.