State Farm's official reports or statements to regulatory bodies

State Farm Cancels 1,600 Policies in Pacific Palisades Before Wildfires

Jan 8, 2025, 10:47 PM

State Farm and several other major insurance companies canceled hundreds of homeowners' fire insurance policies in California last summer, including 1,600 policies in the Pacific Palisades area of Los Angeles County, which is currently experiencing devastating wildfires. The cancellations have left many homeowners, including elderly residents, without coverage during the disaster, exacerbating California's ongoing insurance crisis. The insurers' withdrawal is attributed to regulatory constraints that prevented them from raising premiums to cover increased wildfire risks. State Farm has projected dropping up to 1 million policies in California over the next five years. Other insurers, such as Allstate, have also ceased writing new home and condo policies in the state. The situation raises concerns that the wildfires could break California's insurance market, as insurers pull back from the homeowners market, impacting the availability and affordability of insurance for at-risk residents in fire-prone areas.