State Farm Won't Be There; Homeowners Insurance Cancellations

Golden Gate bridgePhoto byMaarten van den HeuvelonUnsplash

State Farm Insurance has announced it will be cancelling home and rental insurance for about 72,000 customers in California, nine months after announcing it will not be writing any new business for home insurance in the state.

Reasons given include soaring costs, increasing danger of catastrophes like wildfires, and outdated regulations. The process of divesting business is called non-renewal, which is done as the policies come up for yearly renewal. It will affect some 30,000 homes and 42,000 apartments altogether.

The move comes as California's elected insurance commissioner undertakes a yearlong overhaul of home insurance regulations aimed at calming the state's imploding market by giving insurers more latitude to raise premiums while extracting commitments from them to extend coverage in fire-risk areas, the news group said.

State Farm is the largest insurer in California, and will have to answer question from the Insurance Department about the decision to discontinue coverage for their customers.