State Farm halts new property insurance policies in California

State Farm said Friday, May 26, that it will stop accepting new applications for property and casualty insurance in California, citing rising construction costs and its “rapidly growing catastrophe exposure.”

The policy change for personal and business lines is effective Saturday, May 27, State Farm said. The change does not apply to personal auto insurance or existing home insurance policies in the state.

In a statement, the company said it would work with the California Department of Insurance to restore its market capacity in the state.

“We take seriously our responsibility to manage risk,” the company wrote. “However, it’s necessary to take these actions now to improve the company’s financial strength.”

State Farm holds the largest share of property and casualty insurance policies in the U.S. and controls about 8.3% of California’s market, writing at least $7 billion in premiums, according to 2021 data compiled by the state.