State Farm’s recent filings with the Department of Insurance reveal that thousands of Californians, particularly homeowners in Los Angeles County, will not have their home insurance renewed this summer. This decision will hit upscale neighborhoods on the Westside of Los Angeles especially hard.
Residents in neighborhoods in West Los Angeles and near the Santa Monica Mountains, including Bel-Air, Pacific Palisades, and Woodland Hills, will lose their coverage. This move by State Farm will impact some of the county’s most affluent neighborhoods, increasing financial burdens and risks for homeowners already facing high costs and wildfire threats.
Last month, State Farm announced that it would not renew 72,000 property policies across California, with about 30,000 being home insurance policies. This decision was made due to approved rate hikes not being enough to restore the company’s financial strength.
In a letter to Insurance Commissioner Ricardo Lara, State Farm President Denise Hardin explained the necessity of reducing exposure to match available capital. The letter listed ZIP Codes and the number of homeowners losing coverage, such as 69.4% in Pacific Palisades and 61.5% in Brentwood.
Communities prone to wildfires or at risk following earthquakes were also assessed, including Beverly Hills and Westwood. Thelma Waxman, president of the Brentwood Homeowners Assn., expressed concerns over residents losing coverage and the stress it has caused.
Residents are encouraged to start looking for new home insurance policies as State Farm will notify those affected between July 3 and Aug. 20. State Assemblywoman Jacqui Irwin hopes to address the crisis through regulatory changes to incentivize insurers to continue writing policies in California.
In response to insurers scaling back policies, some Californians have turned to the FAIR Plan as a last resort. However, the surge in enrollment is straining the state insurer’s finances. Lara has proposed new rules to address the crisis and collaborate with insurers to find a resolution.
