State Farm will no longer provide homeowners insurance to new California customers due to wildfire risks and increased construction costs, the company announced Friday.
On Saturday, the insurance company stopped accepting new claims for business and personal lines and property and casualty insurance in California, the company said in a news release.
State Farm said it made the decision because of “historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure and a challenging reinsurance market,” the company said in the communicated.
California’s largest fire last year, the Mosquito Fire, covered more than 100 square miles and endangered more than 9,200 structures. The fire destroyed more than 70 structures.
State Farm said it would continue to work with the California Department of Insurance and lawmakers to build market capacity in the state, but said it was “necessary to take these steps now to improve financial strength.” of the company”.
The company said it would continue to serve existing customers.
California wildfires in the last 3 years
In March, federal officials announced $197 million in grants to help communities across the country become more resilient to wildfires. Of the nearly $200 million, California received $78.9 million.
In 2021, the Dixie Fire in Northern California became the largest wildfire in state history, burning approximately 1 million acres and more than 700 homes.
And in 2020, at least 36 people died, thousands were evacuated and hundreds of homes were destroyed after more than 3.4 million acres burned in California.
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This article originally appeared on USA TODAY: State Farm to stop insuring new homes in California due to wildfires