Home Insurance To Be Discontinued by State Farm Due to Wildfires, Construction Costs in California

The State Farm company will no longer provide home insurance to its new customers. This announcement came after the growing risks of wildfire and increasing costs of construction.

On May 27, the insurance company, State Farm, announced that it will discontinue providing home insurance to its new customers in California. This means that the company will no longer accept applications for business and personal lines property and casualty insurance.

According to Burke, the announcement of changes in home insurance policy came after the growing risks of wildfires, increasing costs of construction, and the challenging reinsurance market. Nonetheless, the State Farm added that the changes will not affect the personal auto insurance.

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Factors that Changed the Home Insurance Policy

According to Singh, the home insurance policy of State Farm has changed after a bout of wildfires occurred in California in 2022. Reportedly, there were around 7,490 wildfires last year which was a decrease of 256 from the average of 7,746 since 2017.

Nonetheless, the State Farm says that it recognizes the efforts of the California Department of Insurance (CDI) to alleviate loss from the wildfires. The company adds that it pledges to collaborate with policymakers and the CDI to help build market capacity in the state.

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