State Farm indicates where homeowners policies will not be renewed in California – NBC Bay Area – Business News (Trending Perfect)


State Farm, the largest homeowners insurer in California, has indicated where it will not renew policies, and some Bay Area residents are affected, according to a report from State Farm's board of directors. San Francisco Chronicle.

according to Information obtained by the newspaper, State Farm will not renew 1,703 policies in Orinda's 94563 ZIP code, which represents 55% of the city's homeowners' policies. This is the highest number of non-renewals for a single zip code in the state. The next highest is in Los Angeles.

Other Bay Area zip codes affected, according to the report, are 94549 in Contra Costa County, 95033 in Santa Clara and Santa Cruz counties, and 95404 and 95409 in Sonoma County.

Last month, State Farm issued a written statement explaining its decision to stop writing new policies for new California homes and to end coverage for about 50,000 current California customers.

“This decision was not made lightly, and was made only after a careful analysis of State Farm's financial health, which continues to be impacted by inflation, catastrophe exposure, reinsurance costs, and restrictions on operating within decades-old insurance regulations,” the statement read.

Homeowners who live in areas at risk for disasters such as wildfires will have to sign up for the state-backed California FAIR plan. They are expensive and only provide fire coverage.

Last month, a nonprofit research group said that insurers are losing money because of California's premium caps, and that for every $1 insurers receive in premiums in the state, $1.08 is spent paying claims, primarily because Forest fires.

The Insurance Information Institute says the California Department of Insurance is working to update regulations that could bring more competitively priced policy options to the state.

“To allow insurers to manage risk better, this means being able to charge what are typically known as actuarially sound interest rates — something that does not happen today,” said Mark Friedlander of the Insurance Information Institute.

Friedlander says it may take a few years for California's homeowners insurance industry to stabilize even after new laws are enacted.



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