The State Farm General Insurance CompanyState Farm General Insurance Company will no longer accept new application for property insurance and other policies in California, owing to historic increases in construction costs and inflation.
Now, the Illinois-based insurance agency has announced that it will discontinue acceptance of applications for business and personal lines property and casualty insurance. State Farm General Insurance Company made the change because of historic increases in construction costs outpacing inflation, rapidly increasing catastrophe exposure, and a challenging reinsurance market, the company said in a statement. The Department of Insurance prioritizes the safety of our homes and communities. The insurance firm said it is necessary to enhance its financial stability. State Farm agents in California will continue to serve existing customers, it said.
The California Department of Insurance said it is dedicated to protecting customers.
The factors driving State Farm's decision are beyond our control, including climate change, reinsurance costs affecting the entire insurance industry, and global inflation, the spokeswoman said.
The cost of housing in California has been one of the most expensive in the nation, a shortage that many believe has exacerbated the homeless crisis up and down the state. To build 1,200 small homes, the state will spend about $30 million.
State Farm has halted new coverage for Kia, Hyundai drivers in several states because they were vulnerable to theft, the company said in a statement.