STATEWIDE – State Farm, the largest property, casualty, and auto insurance provider in the United States, announced Friday they will cease accepting new applications including all business and personal lines property and casualty insurance, effective May 27, 2023.
The company says they made this decision due to historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market.
CA one-year moratorium on cancellation
In 2021, the California Department of Insurance issued a mandatory one-year moratorium on insurance companies canceling or non-renewing residential insurance policies in certain areas within or adjacent to a fire perimeter after a declared state of emergency is issued by the Governor.
“Losing your insurance should be the last thing on someone’s mind after surviving a devastating fire,” said CA Department of Insurance Commissioner Ricardo Lara in 2021. “This law gives millions of Californians breathing room and hits the pause button on insurance non-renewals while people recover.”
State Farm says they take seriously their responsibility to manage risk.
“We recognize the Governor’s administration, legislators, and the California Department of Insurance (CDI) for their wildfire loss mitigation efforts,” said the news release. “However, it’s necessary to take these actions now to improve the company’s financial strength.”
State Farm agents licensed in California will continue to serve existing customers for these products. They will also serve new customers for products not impacted by this decision.
For more information on finding if your ZIP Code was included under any mandatory moratorium visit https://interactive.web.insurance.ca.gov/apex_extprd/f?p=450:50