State Farm giving LA homeowners an option to renew coverage

State Farm, California's largest property insurer, is giving Los Angeles-area homeowners an option to renew their coverage for another term.

In an announcement this week, State Farm said it will pause non-renewals for homeowners, rental dwelling, and residential community association policies in force as of Jan. 7, 2025, extending to all of Los Angeles County. "This decision reflects our commitment to supporting our customers," the company said in a statement. "Our focus is on continuing to meet our customers’ needs and working closely with the State of California to create a sustainable insurance market. This is an evolving situation, and our focus remains on our customers."

Los Angeles County customers will have an option to renew with State Farm for another policy term. Policyholders in the fire zones with total losses would have the option to renew with State Farm for two policy term renewals, as required by law.

Heavy losses from previous wildfires led several major insurers to pull back from the California marketplace recently.

State Farm canceled hundreds of homeowners policies in the fire-ravaged Pacific Palisades area last summer, and announced it would not renew more than 70,000 residential, commercial and rental policies across California. Since May 2023, State Farm has not been writing any new homeowners policies in the state, as wildfire risk and increasing construction costs have led the company’s liabilities to balloon.

At the time of the cancellation, State Farm explained "This decision was not made lightly and only after careful analysis of State Farm General's financial health, which continues to be impacted by inflation, catastrophe exposure, reinsurance costs, and the limitations of working within decades-old insurance regulations … It is necessary to take these actions now."

Last week, California Insurance Commissioner Ricardo Lara issued a mandatory one-year moratorium on insurance non-renewals and cancellations. The Commissioner’s Bulletin shields those within the perimeters or adjoining ZIP Codes of the Palisades and Eaton fires in Los Angeles County for one year from Gov. Gavin Newsom’s Jan. 7 emergency declaration, regardless of whether they suffered a loss.

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Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected].