State Farm To Exit Homeowner Renewal Policies in California
The insurer plans to send non-renewal notices to 72,000 home and apartment policyholders starting this July.
State Farm plans to stop renewing home and apartment insurance policies in California beginning July 3.
The move, which will affect a total of 72,000 policyholders, will be done on a rolling basis and affect homeowners, rental dwelling, residential community association and business owners policies, the insurer said in a March 20 statement. On August 20, the withdrawal will start for commercial apartment policies.
Those affected by the decision will be notified before their policies expire and will be given information on other coverage options, the company said. It added that independent agents in California will continue to service policies not affected by the changes.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
State Farm, which stopped offering new homeowner policies in the state last May, cited issues related to inflation, natural disasters, reinsurance rates and “the limitation of working within decades-old insurance regulations.”
Renters insurance will not be affected, the insurer said, adding that the “difficult but necessary” decision will affect a portion of State Farm's California policyholders as follows:
- Non-renew about 30,000 homeowners, rental dwelling and other property insurance policies (residential community association and business owners). (A rental dwelling policy insures rental home owners.)
- Withdraw from offering commercial apartment policies with the non-renewal of all of those approximately 42,000 policies. (A commercial apartment policy insures apartment owners.)
“We will evaluate the need for any additional business actions as market conditions change,” State Farm said. Combined, the policies represent just over 2% of State Farm General’s policy count in the state.
The move follows those of other insurance companies leaving California, including four Kemper subsidiaries as well as Farmers Direct Property and Casualty Insurance — both of which said last November that they would withdraw from certain homeowner policy markets.
Like Florida, California has seen a number of insurers leave the market, often citing the region's growing climate-related risks and reinsurance rates. Last month, two home insurers said they were eyeing rate hikes in Florida.
In October 2023, a S&P Global Market Intelligence study found a national average spike of about 8.8% in homeowner premiums last year.
In response to the state's uptick in non-renewal notices, the California Department of Insurance recently released 10 tips for finding residential insurance. This includes a help page with links for filing consumer complaints.
RELATED CONTENT
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Esther D’Amico is Kiplinger’s senior news editor. A long-time antitrust and congressional affairs journalist, Esther has covered a range of beats including infrastructure, climate change and the industrial chemicals sector. She previously served as chief correspondent for a financial news service where she chronicled debates in and out of Congress, the Department of Justice, the Federal Trade Commission and the Commerce Department with a particular focus on large mergers and acquisitions. She holds a bachelor’s degree in journalism and in English.
-
Alphabet Stock Falls as Q2 Ad Revenue Growth Slows
Alphabet stock is trading lower Wednesday as slowing ad sales growth offsets a Q2 earnings beat. Here's what you need to know.
By Joey Solitro Published
-
Eight Key Steps to Take When Investing in the Stock Market
The stock market can be a confusing place for beginners, but it doesn't have to be.
By Kiplinger Advisor Collective Published
-
Tech Outage: How to Get Reimbursed if Your Flight Was Canceled or Delayed
Did the global Microsoft outage disrupt your travel plans? Here's how to get reimbursed if your flight was canceled or delayed.
By Erin Bendig Last updated
-
How the Tech Outage Impacted Banks and Finances
A major tech outage that caused chaos at airports also impacted banking and finance.
By Alexandra Svokos Last updated
-
Get Your Starbucks $3 Drink Today
Starbucks $3 Drink specials are available this Friday only, July 19, from 12 to 6 p.m.
By Kathryn Pomroy Published
-
After Amazon Prime Day: The 25 Best Deals Still Going On
If you missed out on Amazon Prime Day, no worries. There are dozens of "too-good-to-miss" Post-Prime Day deals to cash in on, from Moen, Keurig, Apple, Ninja, Levis and more.
By Kathryn Pomroy Published
-
Amazon Prime Day Southwest Deal: 30% Off Domestic Flights
Amazon Prime Day Southwest Deal: 30% Off Domestic Flights
By Kathryn Pomroy Published
-
Amazon Prime Day: Best Deals Under $50
Get the best Amazon Prime Day deals under $50 before they sell out.
By Donna LeValley Published
-
Save Money on Your Energy Bills with These Amazon Prime Day Deals
Amazon Prime Day is prime time to get great deals on energy efficient devices and appliances.
By Donna LeValley Published
-
Amazon Prime Day Savings: The 20 Best Items to Splurge On
Score exclusive Amazon Prime Day savings on those big-ticket items you've been dreaming of.
By Erin Bendig Published