State Farm Drops Coverage for 72,000 California Homes Over Rising Wildfire Risk

State Farm is dropping coverage for 72,000 policies in California, including 30,000 homes, due to high wildfire risk exposure. Over 1,600 homes in Pacific Palisades and 1,300 in Brentwood will lose coverage.

After major losses from wildfires in 2017 and 2018, insurers like Allstate have stopped taking new applicants in California. Rates hikes alone are not enough to offset the risk.

Inflation, regulation, and the cost of reinsurance are also making insurance difficult to provide in California. Companies are asking homeowners to take fire mitigation steps to keep coverage.

The text lists dozens of LA County, Ventura County, Orange County, and San Bernardino County zip codes where State Farm plans to not renew policies on over 15,000 homes.

If more insurers follow State Farm’s lead, homeowners may have to turn to the expensive, bare bones state insurance fund as a last resort. This could become an "outright crisis" according to former Assemblyman Mike Gatto.