State Farm discontinuing 72,000 home policies in California in latest blow to state insurance market

[Eugene]

Source: Associated Press

State Farm discontinuing 72,000 home policies in California in latest blow to state insurance market

Updated 11:06 PM EDT, March 21, 2024

SACRAMENTO, Calif. (AP) — 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

The Illinois-based company, California’s largest insurer, cited soaring costs, the increasing risk of catastrophes like wildfires and outdated regulations as reasons it won’t renew the policies on 30,000 houses and 42,000 apartments, the Bay Area News Group reported Thursday.

“This decision was not made lightly and only after careful analysis of State Farm General’s financial health, which continues to be impacted by inflation, catastrophe exposure, reinsurance costs, and the limitations of working within decades-old insurance regulations,” the company said in a statement Wednesday.

-snip-

Read more: https://apnews.com/article/california-wildfires-state-farm-insurance-149da2ade4546404a8bd02c08416833b

[jimfields33]

1. Not just Florida. I'd like to see some federal guidelines on how insurance should be conducted

If these companies want to move, I think it should be permanent. Florida went through this in 2005-2006 only to be welcomed back when Florida didn’t have a major hurricane in 10 years.

[Juneboarder]

2. Florida is in more of a mess than California...

I'm in the mortgage industry and do loans all over the country. Florida has been notably more difficult to obtain insurance than California by far. Rates are exponentially higher than CA presently and I'm now seeing folks in FL that are opting to have force-placed insurance due to it being cheaper than a policy a homeowner can obtain themselves. Additionally, there's a weird situation going on with insurance in many states right now where the state's Fair Plan is limiting coverages and not providing all-peril policies, which requires homeowners to seek out Difference in Conditions policy to pair with their Fair Plan and obtain a fully covered policy between the two. Insurance is an absolute nightmare, and I'm not trying to diminish what CA is going through by any means.