State Farm, California’s second-largest home insurer, will resume offering new condo and renters insurance policies and increase its cap on new homeowner policies after a year-long pause.
A forced pause
The new move comes after the company halted new applications for homeowners, condo, and renters insurance approximately a year ago, citing increasing wildfire risks and the substantial costs associated with claims arising from these disasters, along with a challenging insurance market in California.
State Farm mentioned the need to “ensure long-term sustainability” in the face of these challenges. This pause had a tangible impact on Californians seeking insurance, limiting their options in an already strained market.
According to reports, State Farm cut 72,000 policies in California due to wildfire risk. Inflation, which has driven up rebuilding costs, among other factors, has further strained the system, leading State Farm and other insurers to take drastic actions in California, such as limiting coverage or pulling back from the market altogether.