California insurance market rattled by withdrawal of major companies

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Two insurance industry giants have pulled back from California’s home insurance marketplace, saying that increasing wildfire risk and soaring construction costs have prompted them to stop writing new policies in the nation’s most populous state.

FILE - A home burns as the Dixie fire jumps Highway 395 south of Janesville, Calif., Aug. 16, 2021. Two insurance industry giants have pulled out of the California marketplace, saying that wildfire risk and the soaring cost of construction prompted them to stop writing new policies in the nation's most populous state. FILE - A home burns as the Dixie fire jumps Highway 395 south of Janesville, Calif., Aug. 16, 2021.

State Farm announced last week it would stop accepting applications for all business and personal lines of property and casualty insurance, citing inflation, a challenging reinsurance market and “rapidly growing catastrophe exposure.” The decision did not impact personal auto insurance. Allstate, another insurance powerhouse, announced in November it would pause new homeowners, condo and commercial insurance policies in California to protect current customers.

 

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