California Home Insurance Crisis Looms as Major Insurers Flee Wildfire Risk

State Farm, California's largest home insurer, is dropping over 70,000 home insurance policies in the state, leaving customers scrambling for coverage.

Several major insurers like Farmers, Allstate, and Travelers have reduced business in California due to rising wildfire risk and constraints around pricing models.

The state-backed California FAIR insurance plan is being overwhelmed as the "insurer of last resort," putting the program at risk if a major wildfire event occurs.

Insurers want to factor rising reinsurance costs into premiums but are currently prohibited from doing so in California.

Proposed state and federal reforms around catastrophe modeling and reinsurance aim to stabilize the market but time is running out before the next fire season.