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State Farm General Insurance Company will no longer accept new claims for property insurance and other policies in California, citing “historic” increases in construction costs and inflation,” the company said Friday.
Starting Saturday, the Illinois-based insurance group will stop accepting claims for property and casualty insurance from businesses and individuals. Moving does not affect personal vehicle insurance.
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“State Farm General Insurance Company made this decision due to historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure and a challenging reinsurance market,” the company said in a statement. a statement. “The Department of Insurance is focused on keeping our homes and communities safe.”
State Farm Insurance Retail Office. The company said it will no longer accept new applications for certain coverages in California, citing high costs. (John Greim/LightRocket via Getty Images/Getty Images)
The insurance company said actions are needed to improve its financial strength. State Farm agents in California will continue to serve existing customers, he said.
A spokesperson for the California Department of Insurance told Fox Business that it is committed to protecting its customers.
“The factors driving State Farm’s decision are beyond our control, including climate change, reinsurance costs affecting the entire insurance industry, and global inflation,” the spokesperson said. .
California has some of the most expensive housing costs in the country amid a shortage that many say has exacerbated the statewide homelessness crisis. The state plans to spend about $30 million to build 1,200 tiny homes.
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In February, State Farm halted new coverage for some Kia and Hyundai drivers in several states because the vehicles were vulnerable to theft, he said.