More insurance companies leaving California (2024)

FAQs

Why are all insurance companies leaving California? ›

In 2022, insurance giant AllState paused its sales of new home insurance policies in California due to wildfires and higher costs of doing business in the state. AUTO INSURANCE PREMIUMS ARE SKYROCKETING.

These non-renewals are California-specific and will happen over the next year on a rolling basis. This decision comes after State Farm announced in May 2023 that it would no longer be accepting new applications for home and business owners.

Allstate stopped issuing new insurance policies for all business and personal property in California back in 2022. Since then, companies like State Farm, Farmers Insurance and The Hartford have made similar business moves.

To clarify, State Farm, Allstate Farmers USAA, Travelers, Nationwide and Chubb are still active in California, they have just either limited or stopped writing new home insurance policies. Current home insurance policies with these providers are still being honored.

State Farm, California's largest home insurance company, announced it would be discontinuing coverage for 72,000 homes and apartment policies in the state starting this summer. The insurer blamed inflation, regulatory costs, and the increasing risks from catastrophes for its decision to scale back in the blue state.

State Farm, which stopped offering new homeowner policies in the state last May, cited issues related to inflation, natural disasters, reinsurance rates and “the limitation of working within decades-old insurance regulations.”

At $886 a year on average, Allstate is the cheapest home insurance company in California. That's based on a policy with $300,000 in dwelling and liability coverage and a $1,000 deductible.

Insurance products in California are offered through AAA Northern California Insurance Agency, License #0175868, in Montana by AAA Montana, Inc., License #9756, in Nevada by AAA Nevada and in Utah by AAA Utah.

State Farm is the largest auto insurer in California as well as the largest property and casualty insurer in the United States overall, providing more than 87 million insurance policies.

California regulates insurance companies and their rate increases, so a number of insurance companies have simply pulled out of the state. It's one reason it's getting harder to find a policy.

Why are insurance companies leaving California and Florida? ›

Several companies like State Farm, Allstate, Farmers and more have limited their property and casualty insurance sales in California and/or Florida over the past year. Climate change and inflation have combined to make insurance claims more frequent and more costly in disaster-prone regions.

With rising insurance claims, companies are finding it difficult to balance their books, leading them to pull out of the market. Another reason for the exodus is the rising cost of auto insurance claims. California is a litigious state, and car owners are more likely to sue for damages in the event of an accident.