California homeowners' insurance retreat
- Company or project State Farm General: Gave construction costs, catastrophe exposure and a challenging reinsurance market as reasons; the statement does not use the word "wildfire". State Farm
- Company or project Allstate: Cited wildfire risk, repair costs, reinsurance costs and Proposition 103 rate-approval limits. TMJ4
- Government and regulators California Senate Budget Committee: Analysis of 23 insurers found non-renewals highest in the counties most exposed to climate risk.
- Press and investigations HousingWire: Reported that State Farm's surplus fell from $4.1 billion to $1.3 billion between 2016 and 2023. HousingWire
Large insurers stopped writing new home policies in California from 2022, citing catastrophe exposure and costs. Policies on the state's insurer of last resort grew from about 271,000 to about 684,000.
California FAIR Plan policies as reported by Insurance Business; exposure about $750 billion, up 242%.
Status As of the second quarter of 2026: FAIR Plan growth had slowed to 1.9%; State Farm was operating under an emergency rate increase; no court ruling is on record in the sources reviewed.
- State Farm General — A 17% emergency rate increase in 2025, against 21.8% requested Digital Insurance
- About 72,000 State Farm policyholders in California — Policies not renewed in 2024 (about 30,000 homes and 42,000 apartment properties) State Farm
- FAIR Plan member insurers — US$1bn assessment after the Los Angeles fires (2025) CalMatters
- Policyholders across California — Up to half of the US$1bn assessment may be passed to them as a temporary fee under a new rule CalMatters
- State Farm's parent company — Required to provide US$400m of capital as a condition of the 2025 rate increase Digital Insurance
- About 100,000 Farmers customers in Florida — Farmers-branded home, auto and umbrella policies stopped in July 2023 Tampa Bay Times
- Los Angeles fire survivors who lost homes — Three-quarters were underinsured, and 70% said claims were delayed, denied or underpaid (survey) Spectrum News 1
- Homes and property in the Palisades and Eaton fires, January 2025 — US$58bn of economic and US$41bn of insured losses (Aon) Claims Journal
What happened
In late 2022 Allstate paused new homeowners, condominium and commercial policies in California, citing wildfire risk, repair costs, reinsurance costs and Proposition 103 rate-approval limits.
On 26 May 2023 State Farm General said it would "cease accepting new applications" for property and casualty lines in California, auto excluded. It cited construction costs, "rapidly growing catastrophe exposure" and "a challenging reinsurance market". The statement does not use the word "wildfire". In March 2024 State Farm said about 72,000 California policies would not be renewed: about 30,000 homes and 42,000 apartment properties.
Policies on the California FAIR Plan, the state-mandated insurer of last resort, rose from 271,327 in September 2022 to 684,388 in March 2026. Its exposure reached about $750 billion, up 242%, covering about 5% of homes. Growth slowed to 1.9% in the second quarter of 2026.
After the January 2025 Los Angeles fires, which Aon recorded as the costliest wildfire event at $58 billion in economic and $41 billion in insured losses, the FAIR Plan levied a $1 billion assessment on member insurers; under a new rule half of it may be passed to policyholders as a temporary fee. A survey reported that three-quarters of those who lost homes were underinsured.
In 2025 State Farm received a 17% emergency rate increase, against 21.8% requested, on condition of $400 million in capital from its parent and no mass non-renewals until the end of 2025. In Florida, Farmers stopped Farmers-branded home, auto and umbrella policies in July 2023, affecting about 100,000 customers. Florida’s state-run Citizens Property Insurance peaked at about 1.4 million policies in September 2023 and had 396,387 by December 2025 as private insurers took policies over.
A California Senate Budget Committee analysis of 23 insurers, about 65% of the market, covering 2018–2023, found non-renewals highest in the counties most exposed to climate risk, and that non-renewals and premiums rose together. The California Department of Insurance allowed insurers to base rates on wildfire models from Verisk, Moody’s RMS and KCC; Consumer Watchdog objected, and the models’ methods were not made public.
- 2022Allstate pauses new home, condo and commercial policies (late 2022); FAIR Plan at 271,327 policies (Sep)
- 2023State Farm stops accepting new property applications (26 May); Farmers leaves Florida (11 Jul); Florida Citizens peaks at about 1.4 million policies (Sep)
- 2024State Farm: about 72,000 California policies not renewed (Mar)
- 2025Los Angeles fires (Jan); $1bn FAIR Plan member assessment (Feb); State Farm 17% emergency rate increase (May); Florida Citizens at 396,387 policies (Dec)
- 2026FAIR Plan at 684,388 policies (Mar); growth slows to 1.9% (Q2)
What was said
“cease accepting new applications”
“rapidly growing catastrophe exposure”
“inflation, catastrophe exposure, reinsurance costs, and the limitations of working within decades-old insurance regulations”
“This business decision was necessary to effectively manage risk exposure.”
“historic increases in construction costs outpacing inflation”
“a challenging reinsurance market”
Where accounts differ
Each party's account, side by side, with its source. The record does not settle these points; it shows them.
Gave construction costs, catastrophe exposure and a challenging reinsurance market as reasons; the statement does not use the word "wildfire".
State FarmCited wildfire risk, repair costs, reinsurance costs and Proposition 103 rate-approval limits.
TMJ4Analysis of 23 insurers found non-renewals highest in the counties most exposed to climate risk.
Reported that State Farm's surplus fell from $4.1 billion to $1.3 billion between 2016 and 2023.
HousingWireAllowed insurers to base rates on wildfire models from Verisk, Moody's RMS and KCC.
University of San Diego CPIL BlogObjected to the use of the models; their methods were not made public.
University of San Diego CPIL BlogHow it looked
Shown
- State Farm's May 2023 statement attributed the stop on new applications to construction costs, catastrophe exposure and reinsurance, without using the word "wildfire".State Farm General · State Farm
Recorded
- California FAIR Plan policies: 271,327 in September 2022, 684,388 in March 2026; exposure up 242%.
- About 72,000 State Farm policies were not renewed in 2024.
- A $1bn FAIR Plan assessment on member insurers followed the Los Angeles fires; under a new rule half may be passed to policyholders.
- In a survey, three-quarters of Los Angeles fire survivors who lost homes were underinsured.
- HousingWire reported that State Farm’s surplus fell from $4.1 billion to $1.3 billion between 2016 and 2023.
- A California Senate Budget Committee analysis of 23 insurers (about 65% of the market), 2018–2023, found non-renewals highest in the counties most exposed to climate risk, and that non-renewals and premiums rose together.
- The Department of Insurance approved a 17% emergency rate increase for State Farm in 2025 against the 21.8% sought, on conditions that included $400 million of capital from the parent company and no mass non-renewals until the end of 2025.
- Florida's state-run Citizens Property Insurance peaked at about 1.4 million policies in September 2023 and had 396,387 by December 2025 as private insurers took policies over.
Who gained
Reached nature or the ground
Gained elsewhere
Responses on record
- state-farm (26 May 2023): Stopped accepting new property and casualty applications in California, citing construction costs, catastrophe exposure and reinsurance. · State Farm
- state-farm (March 2024): Attributed the 2024 non-renewals to inflation, catastrophe exposure, reinsurance costs and decades-old insurance regulations. · State Farm
- allstate (Late 2022): Cited wildfire risk, repair costs, reinsurance costs and Proposition 103 rate-approval limits for pausing new policies. · TMJ4
- farmers (11 July 2023): "This business decision was necessary to effectively manage risk exposure." · Tampa Bay Times
In court and with insurers
Lawsuits and rulings
- 2025–2025Claimant wonState Farm General emergency rate increaseCalifornia insurance regulator · Regulatory · State Farm General →
A 17% emergency rate increase was approved against 21.8% requested, conditional on $400m of capital from the parent and no mass non-renewals until the end of 2025. Digital Insurance
- 2025–2025Outcome not on record$1bn claimedFAIR Plan member assessment after the Los Angeles firesCalifornia FAIR Plan, under state insurance rules · Regulatory · California FAIR Plan → Member insurers
A $1bn assessment was levied on member insurers; a new rule allows half of it to be passed to policyholders as a temporary fee. CalMatters
Insurers
- 2022Cover declinedAllstate → California homeowners, condo and commercial applicantsStated reason: Wildfire risk, repair costs, reinsurance costs and Proposition 103 rate-approval limits
Paused new homeowners, condo and commercial policies in California in late 2022. TMJ4
- 2023Cover declinedState Farm General → California property and casualty applicantsStated reason: "historic increases in construction costs outpacing inflation", "rapidly growing catastrophe exposure", "a challenging reinsurance market"
Announced on 26 May 2023 that it would stop accepting new applications for property and casualty lines; auto not affected. The statement does not mention wildfire. State Farm
- 2024Cover declinedState Farm General → About 72,000 California policyholders (about 30,000 homes, 42,000 apartment properties)Stated reason: "inflation, catastrophe exposure, reinsurance costs, and the limitations of working within decades-old insurance regulations"
Announced in March 2024 that about 72,000 policies would not be renewed. State Farm
- 2023Cover declinedFarmers → About 100,000 Florida customersStated reason: "necessary to effectively manage risk exposure"; hurricanes not named
Stopped Farmers-branded home, auto and umbrella policies in Florida on 11 July 2023. Tampa Bay Times
- 2025Partly paidHomeowners' insurers (not named) → Los Angeles fire survivors
In a survey, 70% of those who lost homes said claims were delayed, denied or underpaid; three-quarters were underinsured. Spectrum News 1
What nature saw
Nature's report opens this page. Below: further outcomes measured on the ground.
What we don't know
Nature
- Not measured Harm to nature: The record holds no measurement of harm to nature.
- Disputed Did insurers withdraw because of wildfire and climate risk?
Court
- Unclear FAIR Plan member assessment after the Los Angeles fires: outcome not on record.
Accounts
- Disputed Should insurers be allowed to set rates with wildfire models whose methods are not public?
Record
- None on record The sources reviewed document a Farmers withdrawal only in Florida; no Farmers statement on California new business was found.
- None on record State Farm’s May 2023 statement did not use the word “wildfire”.
- None on record Farmers’ statement on leaving Florida did not name hurricanes.
- Insufficient A March 2026 State Farm settlement over rates was reported but is not verified in the sources reviewed.
- Insufficient HousingWire’s report that State Farm General’s surplus fell from $4.1 billion (2016) to $1.3 billion (2023) was not independently verified.
- None on record How much of the $1bn assessment has been passed on to policyholders was not found.
- None on record The methods of the wildfire models that insurers may now use to set rates were not made public.
Did the harm stop?
Not applicable. Private insurers limited new business and the risk moved to the state’s insurer of last resort; FAIR Plan growth slowed to 1.9% in the second quarter of 2026, after growth of 43% from September 2024 to December 2025.
Who paid?
Homeowners moved to the FAIR Plan, and policyholders statewide, to whom up to half of a $1bn assessment may be passed; most LA fire survivors who lost homes were underinsured.
Sources
Company or project
- State Farm General Insurance Company California new business updateState Farm · 2023-05-26
- Update on CaliforniaState Farm · 2024-03
Government and regulators
- FAIR Plan growth slows below 2% as California's insurance market continues to show signs of recoveryCalifornia Department of Insurance · 2026
Press and investigations
- Farmers leaving FloridaTampa Bay Times · 2023-07-11
- California's FAIR Plan carries growing load as insurers retreat beyond wildfire zonesInsurance Business · 2026
- Homeowners insurance costs rising in California FAIR PlanCalMatters · 2025-02-11
- State Farm emergency rate increase approved in CaliforniaDigital Insurance · 2025-05
- 75% of LA fire survivors were underinsuredSpectrum News 1 · 2025-07-07
- Aon report on 2025 catastrophe lossesClaims Journal · 2026-01-22
- Citizens Property Insurance now has fewer than 400,000 policiesWUSF · 2025-12-27
- State Farm will not renew more than 70k property policies in CaliforniaHousingWire · 2024-03
Researchers
- Department of Insurance allows insurers to base rates on wildfire modelsUniversity of San Diego CPIL Blog · 2025-10-30
Connected cases
- California FAIR Plan policies rise 152% as Florida Citizens shrinks United States · 2022–2026
- Farmers Insurance (Insurer) — here: Left Florida home, auto and umbrella market (2023); there: Stopped writing Florida home, auto and umbrella policies
- California FAIR Plan (Insurer) — here: State-mandated insurer of last resort; there: State-mandated insurer of last resort; policy count grew
- Citizens Property Insurance (Florida) (Public authority) — here: Florida state-run insurer; there: Florida state-run insurer; policy count fell
- Farmers Insurance ends about 100,000 Florida home, auto and umbrella policies United States · 2023–2026
- Farmers Insurance (Insurer) — here: Left Florida home, auto and umbrella market (2023); there: insurer that stopped the policies
- Citizens Property Insurance (Florida) (Public authority) — here: Florida state-run insurer; there: state-run insurer whose policy count fell
- Florida Citizens depopulation and insurer affiliate profits United States · 2017–2026
- Farmers Insurance (Insurer) — here: Left Florida home, auto and umbrella market (2023); there: Insurer that stopped branded Florida policies
- Citizens Property Insurance (Florida) (Public authority) — here: Florida state-run insurer; there: State-run insurer of last resort