State Farm will no longer issue property insurance in California https://t.co/l6UotTTgac

— WCPO 9 (@WCPO) May 27, 2023

State Farm will no longer sell new homeowner and property insurance policies in California, citing the state’s wildfire risk and construction costs outpacing inflation.

As of Saturday, the agency will cease accepting new applications, including all business and personal lines property and casualty insurance, it said. State Farm added the decision does not impact personal auto insurance.

“State Farm General Insurance Company made this decision due to historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market,” the company said in a statement. “We take seriously our responsibility to manage risk. We recognize the Governor’s administration, legislators, and the California Department of Insurance (CDI) for their wildfire loss mitigation efforts. We pledge to work constructively with the CDI and policymakers to help build market capacity in California. However, it’s necessary to take these actions now to improve the company’s financial strength.”