State Farm General Insurance Company announced on March 20 it will not renew more than 70,000 insurance policies covering homeowners and commerical apartment buildings in California.
The company released the following information:
“State Farm General Insurance Company is working to ensure its long-term sustainability in California. In doing so, State Farm General has had to make some difficult but necessary decisions that will impact a portion of our California policyholders as follows:
Non-renew approximately 30,000 homeowners, rental dwelling and other property insurance policies including residential community association and business owners). A rental dwelling policy insures rental home owners. Renters insurance is not affected.
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. Renters insurance is not affected.
These actions are California-specific and will occur on a rolling basis over the next year, beginning on July 3, 2024, for homeowners, rental dwelling, residential community association and business owners policies and on Aug. 20, 2024, for commercial apartment policies. Combined, these policies represent just over 2% of State Farm General’s policy count in California.
This decision was not made lightly and only after careful analysis of State Farm General’s financial health, which continues to be impacted by inflation, catastrophe exposure, reinsurance costs and the limitations of working within decades-old insurance regulations.
State Farm General takes seriously our responsibility to maintain adequate claims-paying capacity for our customers and to comply with applicable financial solvency laws. It is necessary to take these actions now.
We also recognize the Insurance Commissioner’s proposed regulatory reforms, such as streamlining the rate application process, accounting for catastrophe modeling and reinsurance costs in rates, and addressing FAIR Plan vulnerabilities. We will continue to work constructively with the California Department of Insurance, the Governor’s Office and policymakers to actively pursue these reforms in order to establish an environment in which insurance rates are better aligned with risk.
We will notify customers impacted by this decision in advance of their policy expiration to provide information on other coverage options. State Farm independent contractor agents licensed in California will continue to service policies not impacted by these decisions. State Farm General’s May 2023 decision regarding new applications remains unchanged. We will evaluate the need for any additional business actions as market conditions change.”
It is unknown how many customers in the Santa Clarita Valley will be affected by the State Farm announcement.
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Alice J. Roden started working for Trending Insurance News at the end of 2021. Alice grew up in Salt Lake City, UT. A writer with a vast insurance industry background Alice has help with several of the biggest insurance companies. Before joining Trending Insurance News, Alice briefly worked as a freelance journalist for several radio stations. She covers home, renters and other property insurance stories.