A private wild land firefighter monitors a backfire along Old Lawley Toll Road during the Glass Fire in Calistoga, California, U.S., October 2, 2020. Picture taken October 2, 2020.
Stephen Lam | Reuters
State Farm General Insurance Company on Friday announced that it will stop accepting new homeowners insurance applications in California, citing “rapidly growing” catastrophe risks like wildfires, “historic increases” in construction costs and a challenging reinsurance market.
“We take seriously our responsibility to manage risk,” the company said in a release.
State Farm said it will stop accepting new business, personal lines property and casualty insurance applications starting Saturday. The new policy will not impact personal auto insurance, according to the release. State Farm’s independent contractor agents will also continue to serve existing customers.
The company said it will work with the California Department of Insurance and other policymakers to improve conditions in California, but that State Farm decided to take action to improve its “financial strength.
“We will continue to evaluate our approach based on changing market conditions,” State Farm said.
State Farm did not immediately respond to CNBC’s request for comment.