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Due to the risk of wildfires, State Farm will no longer provide insurance for new residences in California.

Due to the risk of wildfires and rising building costs, State Farm will no longer offer home insurance to new clients in California, the business announced on Friday.

According to a news release from the company, the insurance company stopped taking applications for commercial, personal, and liability insurance in California on Saturday.

Because of “historic increases in construction costs outpacing inflation, rapidly expanding catastrophe exposure, and a challenging reinsurance market,” State Farm claimed it had to make this choice.

The Mosquito Fire, which consumed more than 100 square miles of California last year and endangered over 9,200 properties, was the state’s largest fire. More than 70 structures were destroyed by the fire.

State Farm stated that it will keep working with lawmakers and the California Department of Insurance to expand market capacity in the state but added that it is “necessary to take these actions now to improve the company’s financial strength.”

three years of Californian wildfires

Federal officials announced grants totaling $197 million in March to assist cities nationwide in building up their wildfire resistance. California received $78.9 million of that total.

The Dixie Fire in Northern California, which destroyed over 700 homes and almost 1 million acres, was the state’s largest single wildfire in 2021.

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