State Farm To Exit Homeowner Renewal Policies in California
The insurer plans to send non-renewal notices to 72,000 home and apartment policyholders starting this July.
![View of San Francisco's Golden Gate Bridge from the Fort Baker side of California.](https://cdn.mos.cms.futurecdn.net/h88oh8uVxXEUyB7KpDgHGd-415-80.jpg)
State Farm plans to stop renewing home and apartment insurance policies in California beginning July 3.
The move, which will affect a total of 72,000 policyholders, will be done on a rolling basis and affect homeowners, rental dwelling, residential community association and business owners policies, the insurer said in a March 20 statement. On August 20, the withdrawal will start for commercial apartment policies.
Those affected by the decision will be notified before their policies expire and will be given information on other coverage options, the company said. It added that independent agents in California will continue to service policies not affected by the changes.
![https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-200-80.png](https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-320-80.png)
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
State Farm, which stopped offering new homeowner policies in the state last May, cited issues related to inflation, natural disasters, reinsurance rates and “the limitation of working within decades-old insurance regulations.”
Renters insurance will not be affected, the insurer said, adding that the “difficult but necessary” decision will affect a portion of State Farm's California policyholders as follows:
- Non-renew about 30,000 homeowners, rental dwelling and other property insurance policies (residential community association and business owners). (A rental dwelling policy insures rental home owners.)
- 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.)
“We will evaluate the need for any additional business actions as market conditions change,” State Farm said. Combined, the policies represent just over 2% of State Farm General’s policy count in the state.
The move follows those of other insurance companies leaving California, including four Kemper subsidiaries as well as Farmers Direct Property and Casualty Insurance — both of which said last November that they would withdraw from certain homeowner policy markets.
Like Florida, California has seen a number of insurers leave the market, often citing the region's growing climate-related risks and reinsurance rates. Last month, two home insurers said they were eyeing rate hikes in Florida.
In October 2023, a S&P Global Market Intelligence study found a national average spike of about 8.8% in homeowner premiums last year.
In response to the state's uptick in non-renewal notices, the California Department of Insurance recently released 10 tips for finding residential insurance. This includes a help page with links for filing consumer complaints.
RELATED CONTENT
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Esther D’Amico is Kiplinger’s senior news editor. A long-time antitrust and congressional affairs journalist, Esther has covered a range of beats including infrastructure, climate change and the industrial chemicals sector. She previously served as chief correspondent for a financial news service where she chronicled debates in and out of Congress, the Department of Justice, the Federal Trade Commission and the Commerce Department with a particular focus on large mergers and acquisitions. She holds a bachelor’s degree in journalism and in English.
-
5 Stocks to Buy for a Trump Presidency
The race for the White House is heating up and these five stocks are set to benefit if Donald Trump claims victory.
By Will Ashworth Published
-
6 Target-Date Funds to Buy For Your Retirement
These six target-date funds are good set-it-and-forget-it options that are a staple of retirement plans.
By Nellie S. Huang Published
-
This "Super" 529 Strategy Can Help You Jumpstart College Savings
This 529 strategy — superfunding a 529 — can help you maximize savings for a child or grandchild's education expenses.
By Erin Bendig Published
-
How to Deal With Inflation: Advice From a Financial Adviser
Higher prices are hitting everyone, but if you're especially hurting, here are some ways that could help you to cope.
By Kelsey M. Simasko, Esq. Published
-
How Long $750,000 in Savings Plus Social Security Will Last in Every State
How long $750,000 plus Social Security will last depends on when you retire and where you live.
By Donna LeValley Published
-
Mixed Jobs Report Keeps Fed on Track for Rate Cuts: What the Experts Are Saying
Jobs Report The Fed will cut rates this month. The only question is by how much.
By Dan Burrows Published
-
Is It Worth It to Upgrade to the New iPhone 16? Well, Yes.
Apple's iPhone 16 lineup will see significant changes across every model with dazzling new features and upgrades. Plus, Apple Intelligence will get a boost with the A18 Pro processor.
By Kathryn Pomroy Published
-
Recent Graduate? Financial Fitness Starts Here
Once you've landed a job, it's time to optimize your starting salary with a focus on creating a budget, paying off student debt and saving for retirement.
By Vanessa Okwuraiwe Published
-
Finance 101: Money Skills Every New College Student Needs
College is a perfect time to put financial know-how to the test. Here's how parents can set their kids up for success by making smart money choices.
By Leila Evans, CFP® Published
-
Does the Government Insure You?
It might surprise you to learn that you could be relying on Uncle Sam for some of your insurance needs.
By Karl Susman, CPCU, LUTCF, CIC, CSFP, CFS, CPIA, AAI-M, PLCS Published