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State Farm General Insurance Company announced in March that it plans to non-renew about 30,000 property insurance and 42,000 commercial apartment policies in California.
Recent filings with the California Department of Insurance show where the nonrenewals will be concentrated.
State Farm wrote in state filings that it would not renew policies “that present the most substantial wildfire or fire following earthquake hazards, or that are in areas of significant concentration.”
Here is the complete list of zip codes where State Farm will not renew policies.
It’s important to note that nonrenewal is not canceling. Customers affected by the decision will retain coverage until their current contract is up. The company said those impacted will be notified between July 3 and Aug. 20.
State Farm, California’s largest insurer as of 2022, said the move would impact 2% of its total policies in the state and was made to ensure “long-term sustainability.”
“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,” the company said in a statement.
The company also said it will continue working with the Department of Insurance, Gov. Gavin Newsom and other policymakers as they pursue reforms “to establish an environment in which insurance rates are better aligned with risk.”
In February, the state’s insurance department announced proposals to reform California’s insurance regulations. The new proposal would allow insurance companies to switch from using historical data to catastrophe modeling, meaning companies would calculate projections of future risk when raising rates and pass on the cost of reinsurance to consumers.
The new changes are expected to take effect at the end of the year.
Last year, State Farm announced it would stop accepting new insurance applications for all business and personal property in California.
Since then, other companies like Allstate have announced similar moves.
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