A private wildland firefighter monitors a backfire on the Old Lawley Toll Road during the Glass Fire in Calistoga, California, US, October 2, 2020. Image taken on October 2, 2020.
Stephen Lamm | reuters
State Farm General Insurance Co. announced Friday that it will stop accepting insurance applications from new homeowners in California, citing “rapidly increasing” disaster risks such as wildfires, “historic increases” in construction costs and a Including the challenging reinsurance market.
“We take our responsibility to manage risk very seriously,” the company said in a release.
State Farm said it will stop accepting new business, personal property and casualty insurance applications starting Saturday. According to the release, the new policy will not affect individual auto insurance. State Farm independent contractor agents will also continue to serve existing customers.
The company said it would work with the California Department of Insurance and other policy makers to improve conditions in California, but State Farm decided to take action to improve its “financial strength”.
“We will continue to evaluate our outlook based on changing market conditions,” State Farm said.
State Farm did not immediately respond to CNBC’s request for comment.