CUT OFF

State Farm Is Done Insuring Homes for New Customers in California

The company cited wildfires and high costs as the reason for the moratorium.

The insurance giant State Farm says it’s stopped accepting applications for homeowner insurance in California. The decision has massive implications in the insurance industry, which has been bled dry by destructive wildfires and exorbitant construction costs in the Golden State. Existing customers won’t be affected by the moratorium, the insurer says, but the cutoff for new applicants began Saturday. State Farm has long been one of California’s largest insurance providers but said in a statement the decision was “necessary” to “improve the company’s financial strength.” Upwards of 25,000 homes and other structures have been destroyed by California fires since 2018, with thousands more badly damaged. The unrelenting blazes—and their frequency—has put a strain on insurers in the state, which has led the price of premiums to spike. Florida, equally ravaged by hurricanes and flash floods, faces a similar insurance crisis but hasn’t had a major provider pause applications.