Homeowner’s insurance policythat lenders typically require for collateral, covering the cost of loss and damage to your property in the event of disasters and other unexpected events.

State Farm, a large insurance company, speak it no longer writes new homeowner insurance policies in California. John asked VERIFY if this decision affects all State Farm customers in the state, including those with existing homeowners insurance policies.

Will existing State Farm homeowners insurance customers in California lose coverage?

No, current State Farm homeowner’s insurance customers in California will not lose coverage.

state farm announced that as of May 27, the company will no longer accept new insurance policy applications for both personal and business properties in California, citing “construction costs rising faster than inflation, Catastrophic risk increases rapidly and the reinsurance market is challenging.” The company says it is still writing new private auto insurance policies.

This decision only applies to new homeowners insurance policies in the state. “Existing customers will not lose coverage” and people can still renew their existing policies, California Department of Insurance clarifies on May 30.

State Farm is the only California homeowner’s insurer that has not denied any policy renewals due to wildfire risk since the 2017 fire, Rex Frazier, president of the California Federation of Individual Insurs (PDICs) ), tell VERIFY.

The Department of Insurance said factors beyond the state’s control, including “climate change challenges, higher reinsurance costs affecting the insurance industry as a whole, and global inflation, ” is driving State Farm’s decision.

State Farm isn’t the only insurer that has stopped writing new property insurance policies in California.

A spokesperson for Allstate told partner station VERIFY ABC10 that it “paused new commercial, condo and homeowner policies in California last year” so the company “can continue to protect customers.” Present.” The insurance company did not clarify the reasoning behind its decision.

American International Corporation (AIG) also announced in January 2022 that it is exiting the California homeowner’s insurance market.

The Insurance Information Institute (III) said in a statement: “The number of acres burned in California has steadily increased in recent years, as more people move to fire-prone areas. of the state. “More and more homes are at risk – combined with increased costs to repair or replace damaged or burned homes – resulting in increased insured losses. Above all these are underwriting challenges related to state public policy.”

Under III, other US states, including Florida and Louisiana, are also addressing insurance problems for their homeowners due to hurricane activity and fraud concerns.

Add word VERIFICATION: No, homeowners and renters insurance policies usually do not cover flood damage

In Florida, some insurance companies have become insolvent and others have decided that they will no longer write homeowners insurance in the state, Institute says. CEO Sean Kevelighan said this comes as the state is “the home of too many lawsuits and too many fraudulent roof replacement schemes.”

Louisiana’s Property Insurance Market has been deteriorating following record levels of hurricane activity during the 2020 and 2021 seasons. Under III, dozens of insurers have voluntarily withdrawn from the market in the state and more than 50 have stopped writing contracts. New co-insurance in hurricane-prone parishes. In addition, twelve insurance companies that write policies to homeowners in the state were declared insolvent between July 2021 and February 2023.

According to the Department of Insurance, while State Farm is restricting operations in California, about 115 companies continue to write residential policies in the state, depending on the characteristics of the home, wildfire risk score and community in which the house resides.

State online insurance finder can help residents locate an agent in their area. State Department of Insurance specialists can also answer California insurance questions or claims by phone at 800-927-4357 or via online chat.