State Farm's projected decline of 1 million policies in California by 2028 reflects its response to financial distress, driven by rising wildfire risks and construction costs.
Since May 2023, State Farm has ceased writing new homeowners policies in California, attributing this decision to an increase in liabilities from wildfire risks.
Amy Bach notes that potential future reforms in the insurance market may alter State Farm's projections, as changes could incentivize insurers to expand their policies.
The insurance commissioner anticipates an opening of the market in 2025, suggesting that many insurers could be more willing to write additional policies.
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