The California homeowners’ insurance crisis reached another critical stage this week when State Farm General Insurance announced that it would not renew policies for 72,000 property owners across the state. The insurance giant announced Wednesday that it would not renew homeowner insurance policies for 30,000 customers, including owners of condominiums. It also plans not to offer commercial apartment policies and won’t renew the 42,000 now in place.
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State Farm’s decision not to renew policies comes as thousands of Californians are finding it extremely difficult to insure their homes and commercial properties as companies increase rates, limit coverage or stop offering policies in areas increasingly susceptible to natural disasters. The companies have cited high inflation, catastrophe exposure, reinsurance costs and the limitation of decades-old insurance regulations as reasons for scaling back policies in the state.
There is a pattern:
- In February, California had the nation’s highest unemployment rate.
- People are voting with their feet. Between 2020 and 2022, the Census reports, California had a net population loss of 508,903.
- When the Census takes housing costs into account, California has the highest poverty rate of the 50 states, at 13.2 percent. See the Census poverty report at page 47.
- California’s homeless rate is 44 per 10,000 v. Florida’s 12 per 10,000.
- The Tax Foundation’s State Business Tax Climate Index ranks California 48th of the 50 states.
- When Consumer Affairs ranked states by the condition of their roads, California was the fourth-worst.
- On education, US News ranks California in 20th place.