State Farm General Insurance Company is set to drop approximately 30,000 customers this year in California.
In doing so, State Farm General has had to make some difficult but necessary decisions that impact a portion of California policyholders.
As follows:
- Non-renew approximately 30,000 homeowners, rental dwelling, and other property insurance policies (residential community association and business owners). (A rental dwelling policy insures rental homeowners. 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 are set to occur on a rolling basis over the next year beginning on Wednesday, July 3 for homeowners, rental dwelling, residential community association and business owners policies and on Tuesday, Aug. 20 for commercial policies.
Combined, these policies represent just over 2 percent of the State Farm General policy count in California.
State Farm General takes responsibility for maintaining adequate claims-paying capacity for customers and complying with applicable financial solvency laws seriously, officials said.
It is necessary to take these actions, according to officials.
State Farm also recognizes the Insurance Commissioners proposed regulatory reforms, such as streamlining the rate application process, accounting for catastrophe modeling and reinsurance costs in rates and addressing FAIR Plan vulnerabilities.
State Farm continues 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.
State Farm will notify customers who are impacted by this decision before their policy expires to provide information on other coverage options.
State Farm independent contractor agents licensed in California will continue to serve policies unimpacted by these decisions.
State Farm Generals’ May 2023 decision regarding new applications remains unchanged and is set to evaluate the need for any additional business actions as market conditions change.
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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.