State Farm is no longer accepting new applications for homeowners’ insurance from California residents, citing construction costs and catastrophic events.
The largest auto and home insurance provider stopped accepting the applications of all business and personal lines of property and casualty insurance on Saturday, according to a Friday announcement.
The change won’t impact those with personal auto insurance, and current property and casualty insurance holders can still file claims for property that’s already covered by State Farm.
“State Farm General Insurance Company made this decision due to historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market,” the statement from insurance giant said.
California has experienced over 7000 wildfires per year on average for the past five years, CNN reported. The devastating blazes have destroyed thousands of homes.
“We pledge to work constructively with the CDI and policymakers to help build market capacity in California,” Friday’s statement from State Farm said. “However, it’s necessary to take these actions now to improve the company’s financial strength.”