State Farm in California: What you need to know

Did State Farm leave California?

No. State Farm still operates in California, but has not written new home insurance policies there since 2023. It has also nonrenewed thousands of policies in high-risk areas.

However, the carrier did agree to stop some nonrenewals in return for policy adjustments, and continues to be the largest homeowners insurance company in the state by market share.

Other companies that have made similar moves include The Hartford, Tokio Marine, AIG and Chubb.

Why did State Farm leave California?

State Farm didn't leave California, but it has been working to reduce its exposure by stopping new policies and nonrenewing policies in some of the highest-risk areas.

Insurance companies in California have difficulty passing on these higher costs to customers. Insurers operating in the state are subject to price controls and must file an application seeking approval to raise rates. State Farm has repeatedly requested rate increases to keep up with the losses in the state.

"In times of rapid inflation like today, it is difficult to operate a business when underlying costs are rising significantly," says Rex Frazier, president of the Personal Insurance Federation of California. "But it takes six months or more to raise rates through the state approval process."

Why are insurance companies leaving California?

There are a couple of reasons why some insurance companies are pulling out of California, particularly for property insurance:

Increased risk of wildfires: California has been hit hard by wildfires in recent years, and these events are becoming more frequent and severe due to climate change.
Rising construction costs: The cost of rebuilding homes after a wildfire or other disasters has also been rising. It means that even if an insurance company pays out a claim, it may not be enough to cover the full cost of repairs or replacement.
Reinsurance challenges: Reinsurance is a type of insurance that insurance carriers buy to protect themselves from large losses. The challenging reinsurance market has worsened in recent years, making it harder for insurance companies to cover the risks associated with California properties and ensure adequate claims paying capacity.

Unless home insurance companies can find ways to balance costs, they will stop offering coverage.

Until recently, California was "...the only state in the country that does not allow insurers’ rates to be based upon their actual reinsurance costs," Frazier says.

But that has changed.

California lawmakers have made changes that require all insurance companies that do business in the state to write in high-risk areas and will allow them to pass reinsurance costs on to consumers. That will help stabilize the market, but will also mean increased rates.

What insurance companies are writing homeowners policies in California?

There are still plenty of insurance companies writing new home insurance coverage in California, including:

Travelers
USAA
Auto Club Enterprises (AAA)
Nationwide
CSAA Insurance (AAA)
Mercury Insurance
Farmers, which has resumed writing condo and renters policies and recently increased the number of new homeowners policies it will write.

“The Department of Insurance has seen companies pause and then re-start writing policies as conditions change,” says Gabriel Sanchez, press secretary for the California Department of Insurance.

He adds that the factors behind State Farm’s decision to stop writing new policies “are beyond our control,” including worldwide inflation, climate change and reinsurance costs impacting the entire insurance industry.

"While insurance companies prioritize their short-term financial goals, the long-term goal of the Department of Insurance is protecting consumers," Gabriel says.

Gabriel says more than 115 insurance companies currently offer California homeowners insurance.

Homeowners who live in areas at high risk -- such as places that have traditionally been in the path of wildfires – and who have struggled to secure homeowners insurance coverage can purchase a policy through the California Fair Plan.

However, this coverage is typically more expensive than what homeowners will find in the traditional home insurance market.

Which insurance companies left California?

This is a list of insurance companies that have stopped writing new policies in California or reduced coverage:

State Farm
Allstate
AIG
Chubb
Falls Lake Insurance
AmGUARD
Tokio Marine America Insurance Co.
Trans Pacific Insurance Co.
Safeco

It's important to note that the status of these companies in California varies. Some aren't writing any new policies or have cut back, something that could change, and some are nonrenewing existing policies. Some of the changes impact homeowners, while others impact condo or renters insurance.

How can you get homeowners insurance in California?

Here are some steps to get a new home insurance policy or ensure yours isn't nonrenewed:

Follow up on a nonrenewal or cancellation. If you get a notice that your homeowners insurance is being nonrenewed or canceled, contact your home insurance company immediately. Ask for an explanation and if there is anything you can do to reverse the decision.
Take steps towards fire mitigation. Home insurance companies prefer to insure homes where the risk of damage is lower, so taking steps to fireproof your home can make it easier to keep your current coverage or find a new policy. You can even earn a discount for wildfire mitigation.
Work with a local agent. A home insurance agent who lives and works in your area will know which companies are more likely to provide a policy.
Ask your neighbors. Find out which insurance companies are insuring other homes in your neighborhood and contact those companies for quotes.
Consider the California FAIR plan. If you can't get insurance any other way, the state insurer of last resort may be your only option.

Legislators are working to keep home insurance options available for California residents, but it is likely to mean rate increases. As you look for coverage, make sure to ask about any discounts you may qualify for that can mitigate the costs.

Sources

Newsroom State Farm. "State Farm in California" Accessed January 2026

FAQ: California home insurance crisis

Did Farmers Insurance leave California?

No. Farmers had pulled back from the California market, but has since added additional home insurance policies and re-opened to the condo and renters markets.

Did Allstate leave California?

No. Allstate has stopped selling new home insurance policies in California, and some existing policies have been nonrenewed, but the company still operates in the state.

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