CALIFORNIA, USA — More than 70,000 State Farm insurance customers in California will no longer have their policies renewed starting in July.
The company says they will no longer renew property insurance policies for 30,000 homeowners, rental, business owners and residential community associations to “ensure its long-term sustainability in California.”
Another 42,000 policies for those in commercial apartment policies will also not be renewed beginning Aug. 20. State Farm says they’re entirely withdrawing from offering those policies in the future.
State Farm says these “difficult but necessary” changes will happen on a rolling basis and are only 2% of 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,” the company said in a 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.”
This change also comes as State Farm, Geico and other major insurance companies have either stopped doing business in the state, refused to take on new policies or have increased costs of using their company.
The California Department of Insurance also recently announced changes which could lead to more accurate pricing for homeowners insurance policies. Read more about those proposed changes here.
Those impacted by this change will be notified by State Farm, but impacted customers can also call the California Department of Insurance at 800-927-4357 or find more information at on their website here.
