California’s insurance woes are continuing.
Thursday, State Farm announced that it will not renew over 70,000 policies in California.
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Driving the news: This decision will impact approximately 2% of the total policies held by State Farm in California.
- The affected policyholders will be notified during the summer.
- “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 said in a statement.
The backstory: The insurance industry in California has been facing difficulties, especially after major wildfire seasons over the last several years that have resulted in substantial losses.
- Allstate has previously stopped accepting new insurance applications in California.
- State Farm had already announced last June that it would stop accepting applications for all businesses and personal lines of property and casualty insurance.
