State Farm General Insurance Company recently announced that it will no longer accept new applications for property insurance and other policies in California, citing "historic" increases in construction costs and inflation. The Illinois-based State Farm Insurance group will cease to accept applications for business and personal lines property and casualty insurance.
The company released a statement reading: "State Farm General Insurance Company made this decision due to historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market.”
The company said actions were necessary to improve its financial strength, while vowing that California State Farm agents will continue to serve existing customers.
A (likely chagrinned) spokesperson for the California Department of Insurance told Fox Business News: "The factors driving State Farm’s decision are beyond our control, including climate change, reinsurance costs affecting the entire insurance industry, and global inflation.”
If California’s powers-that-be truly believe all the factors are “beyond their control,” they are even more pathetic than I thought. That’s complete bunk. State Farm didn’t announce that it would no longer write property (and other) policies in any other state, did it, spokesperson? Just a coincidence? Is ”global” inflation not affecting Arizona, Nevada, Idaho, etc.?
Truth is, the state’s one-party government has enacted a myriad of policies that have caused home prices and construction costs to skyrocket over the years. California has virtually eliminated the middle class. Only the very wealthy and the homeless are left. The erstwhile Land of Milk and Honey now has the highest poverty rate of any state in the nation. Homeless shelters are ubiquitous. Tent cities litter the landscape. Neither State Farm nor other carriers offer home insurance on portable tents. Moreover, California has historically refused to pro-actively selectively burn dead trees and underbrush that have led to forest fires. Nor has it taken any truly effective action to prevent mudslides and other disasters. The Golden State is no more.
So, Californians, if you seek home insurance-- unlike your neighbor, State Farm isn’t there.