State Farm General Insurance Company will no longer accept new applications for property and casualty insurance or other policies in California, citing a “historic” rise in construction costs and inflation,” the company said Friday.
Starting Saturday, an Illinois-based insurance group will stop accepting applications for property and casualty insurance for businesses and individuals.
This measure does not affect personal car insurance.
“State Farm General Insurance Company made this decision because of historically rising construction costs that have outpaced inflation, rapidly increasing catastrophe risk, and a difficult reinsurance market,” the company said. rice field. mentioned in the release. “The Department of Health is focused on the safety of our homes and communities.”
The insurer said action was needed to improve its financial position.
“We take our risk management responsibilities seriously. added. “But we need to take these steps now to improve the company’s financial strength.”
California State Farm representatives will continue to serve existing customers.
A spokesperson for the California Department of Insurance told Fox Business that the company is committed to protecting its customers.
“The factors driving State Farm’s decisions are beyond our control, including climate change, reinsurance costs affecting the insurance industry as a whole, and global inflation,” the spokesperson said.
California has one of the highest housing costs in the nation, and many argue that the housing shortage is exacerbating the homeless crisis across the state.
The state plans to spend about $30 million to build 1,200 small homes.
State Farm announced in February that it had suspended new coverage in several states for some Kia and Hyundai drivers because their vehicles were prone to theft.
