State Farm plans to stop renewing home and apartment insurance policies in California beginning July 3.
The move, which will affect a total of 72,000 policyholders, will be done on a rolling basis and affect homeowners, rental dwelling, residential community association and business owners policies, the insurer said in a March 20 statement. On August 20, the withdrawal will start for commercial apartment policies.
Those affected by the decision will be notified before their policies expire and will be given information on other coverage options, the company said. It added that independent agents in California will continue to service policies not affected by the changes.
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State Farm, which stopped offering new homeowner policies in the state last May, cited issues related to inflation, natural disasters, reinsurance rates and “the limitation of working within decades-old insurance regulations.”
Renters insurance will not be affected, the insurer said, adding that the “difficult but necessary” decision will affect a portion of State Farm's California policyholders as follows:
- Non-renew about 30,000 homeowners, rental dwelling and other property insurance policies (residential community association and business owners). (A rental dwelling policy insures rental home owners.)
- Withdraw from offering commercial apartment policies with the non-renewal of all of those approximately 42,000 policies. (A commercial apartment policy insures apartment owners.)
“We will evaluate the need for any additional business actions as market conditions change,” State Farm said. Combined, the policies represent just over 2% of State Farm General’s policy count in the state.
The move follows those of other insurance companies leaving California, including four Kemper subsidiaries as well as Farmers Direct Property and Casualty Insurance — both of which said last November that they would withdraw from certain homeowner policy markets.
Like Florida, California has seen a number of insurers leave the market, often citing the region's growing climate-related risks and reinsurance rates. Last month, two home insurers said they were eyeing rate hikes in Florida.
In October 2023, a S&P Global Market Intelligence study found a national average spike of about 8.8% in homeowner premiums last year.
In response to the state's uptick in non-renewal notices, the California Department of Insurance recently released10 tips for finding residential insurance. This includes a help page with links for filing consumer complaints.
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FAQs
Last month, State Farm issued a written statement explaining its decision to no longer write new policies for new California homes and to end coverage for about 50,000 existing California customers.
Why are State Farm cancelling policies? ›
Last month, State Farm, the Illinois-based company and California's largest insurer, cited soaring costs and the increasing risk of natural disasters — like wildfires and outdated regulations — as reasons it won't renew the policies of thousands of homes.
Is State Farm leaving California in 2024? ›
Starting in July 2024, State Farm will stop insuring more than 30,000 residential homes in California, and starting in August, will discontinue coverage on 42,000 commercial apartment properties.
What insurance companies are not renewing in California? ›
According to filings from the state's Department of Insurance, Tokio Marine America Insurance Co. and Trans Pacific Insurance Co. said they would both stop offering homeowners and personal umbrella insurance in the Golden State.
Why is State Farm leaving CA? ›
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.
Who is still selling homeowners insurance in California? ›
Compare Home Insurance Discounts
| Provider | Multi-Policy Bundling | New Homeowner or Home |
|---|
| Liberty Mutual | ✔ | ✔ |
| Farmers | ✔ | ✔ |
| Progressive | ✔ | ✔ |
| Nationwide | ✔ | ✔ |
2 more rowsJun 11, 2024
State Farm said it is dropping policies across California for financial reasons and is ending coverage in areas with wildfire hazards, among other factors.
What insurance companies are leaving California? ›
Tokio Marine and Trans Pacific join State Farm and Allstate in discontinuing coverage for California residents.
Why does State Farm deny so many claims? ›
It's important to know some of the reasons State Farm will deny claims. They might claim that you missed a payment, have lapsed coverage, insufficient evidence, lack of medical records, lack of witnesses, that you had a previous injury, that you really aren't that hurt, etc.
Which California largest home insurance company won't renew 72000 policies? ›
State Farm won't renew homeowners coverage for 72,000 California homes and apartments - CBS News.
State Farm is reducing its presence in California's insurance market, but this primarily affects business and personal lines, such as property and casualty insurance, not auto insurance directly. You don't have to worry because State Farm leaving California will not affect your auto insurance policy.
Is State Farm dropping 1600 homeowners policies in Pacific Palisades? ›
In Pacific Palisades, according to the letter, 69.4% of the 2,342 policyholders — or about 1,600 — will lose coverage. In Brentwood, 61.5% of State Farm's 2,114 customers there will lose their policies, or about 1,300 non-renewals.
Is State Farm cancelling homeowners insurance in California? ›
State Farm will discontinue coverage for 72,000 houses and apartments in California starting this summer, the insurance giant said this week, nine months after announcing it would not issue new home policies in the state. Approximately 30,000 of those are homeowner policies.
Which homeowners insurance company has the highest customer satisfaction? ›
The best home insurance companies at a glance
| Best home insurance category | Company winner |
|---|
| Best for consumer satisfaction | Amica |
| Best coverage | Andover Companies |
| Best for high-value homes | Chubb |
| Best for using an agent | Country Financial |
2 more rowsState Farm said it is working with the California regulators “to establish an environment in which insurance rates are better aligned with risk.” Last year, the company said it would not issue any new policies in California, citing construction costs that were outpacing inflation and “rapidly growing catastrophe ...
What insurance company is closing in California? ›
Tokio Marine and Trans Pacific join State Farm and Allstate in discontinuing coverage for California residents.
Can an insurance company cancel your policy in California? ›
Insurers can cancel your policy if you do not pay your premium. However, you have a 30 day grace period before insurers can cancel your policy.
