State Farm and Allstate said in 2023 and 2022 they would stop writing new policies in California due to fears of massive losses from wildfires and other natural disasters, NBC Bay Area reported. The Hartford said last year it would stop selling new fire insurance policies. Liberty Mutual said it would stop offering condo and rental insurance in 2025 and would begin dropping coverage for existing clients in 2026.
Why California’s wildfires keep getting worse
AccuWeather estimates $52 billion to $57 billion in preliminary damage and economic loss from the Los Angeles wildfires that began this week.
The decision affected properties in some of Los Angeles’ richest neighborhoods, including 1,600 homes in Pacific Palisades, one of the areas that has been hardest hit by the fires. State Farm executives blamed rate hikes approved by the state and high inflation.
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In 2019, Grist.org reported that insurance companies dropped more than 340,000 California homeowners from wildfire-prone areas in just four years. Between 2015 and 2018, the 10 California counties with the most homes in flammable forests saw a 177% increase in homeowners turning to an expensive state-backed insurance program because they could not find private insurance.
As wildfires in California have worsened in recent years, some insurers have said they’re done covering the damage.
