State Farm announced they will not be renewing 70,000 California Home Insurance policies this year, exacerbating the problem of fewer insurers and rising rates from those that remain.

State Farm had already announced they weren’t writing any new policies in 2023. Now the cancellations have begun.

Insurance Commissioner Ricardo Lara calls the situation “a real crisis”. Although enacting a “state of emergency” for all Californians might make things worse.

"By giving the Commissioner emergency powers to throw out the rules that protect against higher rates, you would be tacitly sending California on the same course as Florida... (whose) rates are 2 to 3 times as high"- Consumer Watchdog

The cancellation only affects 2% of their existing policies, but it’s certainly a strong precedent being set by one of America’s largest insurers. Whether other insurance companies follow suit remains to be seen.

For those who don’t have competitive insurance, the California Fair plan is an option. Per ins.gov: “The FAIR Plan is available to California residents and businesses in urban and rural areas who cannot obtain insurance through a regular insurance company.”

Whether residents want to trust their insurance needs to a government program is another conversation altogether.

In the meantime, California homeowners should be closely watching the situation (along with their annual coverage and premiums).

If you need some recommendations for local home insurance agents, give us a call. We’ll be happy to help you find someone who can help.