State Farm General Insurance Co. announced it will not be renewing 72,000 property insurance policies in California.
In a statement on its website, the Bloomington, Illinois-headquartered carrier stated it “had to make some difficult but necessary decisions that will impact a portion of our California policyholders.” Starting on July 3 and stretch over the following 12 months, State Farm will non-renew approximately 30,000 homeowners, rental dwelling, and other property insurance policies including residential community association and business owners; renters’ insurance is not affected. Beginning on Aug. 20, the company is also withdrawing withdraw from offering commercial apartment policies with the non-renewal of all of those approximately 42,000 policies.
The policies facing non-renewal represent approximately 2% of the company’s policies in California.
“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,” said the company in an unattributed statement. “State Farm General takes seriously our responsibility to maintain adequate claims-paying capacity for our customers and to comply with applicable financial solvency laws. It is necessary to take these actions now.”
The California Department of Insurance reacted to the news by raising concern about State Farm’s financial health.
“One of our roles as the insurance regulator is to hold insurance companies accountable for their words and deeds. State Farm General’s decision today raises serious questions about its financial situation — questions the company must answer to regulators,” said Michael Soller, a spokesperson for the department. “As state regulators, we deal with companies that are national and multinational in scale. To be effective for Californians, we join forces with other states so we can understand the basis for insurance companies’ decisions and how they plan to recover financially.”
Soller added that his department needs “to be confident in State Farm’s strategy moving forward to live up to its obligations to its California customers.”
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I have been with State Farm for 50 years and have enjoyed having a wonderful and helpful agent. This year my auto insurance premium increased $150.00 for six months coverage, and I’m 86, retired real estate broker, and I drive less than 3,000 miles a year. I have 3 auto insurance quotes for $150.00 less than State Farm. I can’t remain with State Farm when there is such a difference. By the way, I am also bundling car, home and contents and still you are $150.00 per 6 months more. UNBELIEVABLE
Unfortunately, insurance companies spread risks across all policyholders. Inflation is huge factor but California fires, floods, vandalism are also contributing factors
I can’t believe you are complaining. My insurance costs in Texas with SF have skyrocketed over $10,000. Are you kidding me lady? CA is a crap state for insurers, homeless, overrated, overtaxed, over populated, over trafficked, over polluted. Crap. I really don’t get the attraction to that state.
Try living here and find out! Weather is better, more good high paying jobs, solid economy, quality healthcare, innovative businesses and higher after tax income on average. Oh, and a governor who knows have to run a 21st century economy.
Don’t forget the $80 billion deficit that your governor what’s the rest of us to pay. That’s what I call running an economy.