State Farm won't renew 72,000 insurance policies in California, worsening the state's insurance crisis

Key Facts

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.
“So the numbers just continue to climb, which is a concern — as those numbers climb, our financial stability comes more in question and we come closer to an assessment of the market should we, knock on wood, have a catastrophe.”
In response to the crisis, Insurance Commissioner Ricardo Lara has proposed a set of new rules that would allow insurers to raise rates to cover reinsurance costs and projected losses from catastrophic fires, but also require that they provide coverage for more homes in the canyons and hills.