State Farm Stops New Home Insurance Sales In Calif. Amid Wildfire Risks

"State Farm said it would stop selling new insurance policies to homeowners in California, exacerbating troubles for thousands in the wildfire-prone state, who are already feeling the heat with coverage getting costlier or harder to come by.

State Farm General Insurance Company - State Farm's provider of homeowners insurance in California - said on Friday that it made this decision due to "historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market."

The insurer said it was necessary to take these actions now to improve the company's financial strength.

Homeowners who have lost their home cover can purchase a policy from the California FAIR Plan, a high-risk, privately run insurance pool established under California state law."

Noor Zainab Hussain reports for Reuters May 30, 2023.

Source: Reuters, 05/31/2023