State Farm and Allstate, two of the largest nationwide insurance companies, have decided to pull back from the home insurance marketplace. They are citing the escalating risk of California wildfires and skyrocketing construction costs.
Farmers Insurance canceled numerous property insurance policies in San Diego communities in February due to the active fire risks.
The two industry giants both disclosed that they would no longer write new policies in the state with the most population.
Allstate, announced in November that it would temporarily pause issuing new homeowners, condo, and commercial insurance policies in California. And last week, State Farm said it will stop accepting applications for all commercial and personal lines of property and casualty insurance.
Both State Farm and Allstate had been seeking substantial rate increases. Harvey Rosenfield the founder of Consumer Watchdog, a nonpartisan advocacy group spoke out.
“Insurance companies can’t just stop selling insurance to consumers in order to make more money for themselves,” Rosenfield, who authored Proposition 103 said. “They have to open their books and get the insurance commissioner’s approval.”