State Farm will no longer insure new homes in California, company says
State Farm says it will no longer insure new homes and properties in California due to wildfires and rebuilding costs.
State Farm will no longer insure new homes in California, company says
SAN FRANCISCO -- State Farm says it will no longer insure new homes and properties in California due to wildfires and rebuilding costs.
The new policy began on Saturday.
"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 company wrote on its website.
MORE: Homeowners could still lose fire protection under new insurance proposal: What you need to know
The company also wrote:
"We take seriously our responsibility to manage risk. We recognize the Governor's administration, legislators, and the California Department of Insurance (CDI) for their wildfire loss mitigation efforts. We pledge to work constructively with the CDI and policymakers to help build market capacity in California. However, it's necessary to take these actions now to improve the company's financial strength. We will continue to evaluate our approach based on changing market conditions. State Farm independent contractor agents licensed and authorized in California will continue to serve existing customers for these products and new customers for products not impacted by this decision."
State Farm says existing customers will not be affected.
The company will continue offering auto insurance in the state.
State Farm is the second insurance carrier to stop insuring California homes.
KGO-TV staff contributed to this report
ABC7's Cornell Barnard will have more on this story today at 4:30 p.m.
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Source: KGO-TV
