State Farm has announced its complete withdrawal from the California insurance market, cancelling 1.2 million homeowner policies and leaving the state's insurance crisis at a breaking point.
Why State Farm Is Leaving
The insurer cites unsustainable wildfire losses, regulatory constraints on premium pricing, and reinsurance costs that have tripled since 2020. California's FAIR Plan — the insurer of last resort — is now overwhelmed with applications.
- 1.2 million policies cancelled
- $4.5 billion in wildfire losses since 2020
- FAIR Plan applications up 400%
- Average CA home insurance now $4,200/year
Governor Newsom has called an emergency session to reform insurance regulations, but industry experts say the changes may come too late to prevent other major insurers from following State Farm's exit.
