State Farm is projecting that by 2028, the number of by 1 million, as the insurance giant grapples with financial distress and pulls back from the Golden State. According to a filing submitted to the California Department of Insurance on Sept. 10, the insurer’s policies for property insurance, which includes homeowners insurance, could decline from 3.
1 million at the end of 2023 to 2 million by the end of 2028. Since May 2023, in the state, as wildfire risk and increasing construction costs have led the company’s liabilities to balloon. The drop noted in the filings includes both planned non-renewals, as well as natural attrition as policyholders decide to cancel or switch their insurance coverage.
Amy Bach, executive director of United Policyholders, an insurance consumer advocacy group, said that it’s possible that these projections could change and eventually have State Farm increasing the number of policies in the state, especially if the that it has proposed to the insurance market. These include speeding up the review process for insurers seeking rate hikes and allowing them to factor the projected costs of future wildfires and disasters into their rates. Currently, insurers can only price insurance based on historical models — which consumer watchdogs say keeps their models transparent.
“The insurance commissioner has said that in 2025, he expects the market to open back up and that we’ll see many more insurers willing to write more policies in the new year.
