Email Me: lezama at

State Farm Pulls Home and Business Insurance from California


Climate change is driving up the cost of business in California — and now one of the leading insurers in the state has had enough. On Friday, State Farm announced that it would no longer be accepting new applications for home and business insurance in California.

This historic shift, which has come in response to rising construction costs that are surpassing even the rate of inflation, a challenging insurance market, and a rapid increase in weather-related catastrophe exposure, is driving home the economic realities of climate change.

State Farm’s move follows similar decisions made by other insurance corporations in the state. American International Group (AIG), for instance, recently announced that it would not be renewing policies for several thousand California homeowners.

The trends in this decision only further bolster an already damning body of scientific and statistical evidence. According to the California Air Resources Board’s website, the area burned by wildfires in the state has been steadily increasing since 1950. The National Oceanic and Atmospheric Association (NOAA), a government agency, has reported that 17 of the 20 largest wildfires in California history have occurred since the year 2000. Similarly, of the 20 most destructive fires, measured by the number of buildings destroyed, 18 have taken place in the last two decades.

Furthermore, the NOAA report for 2022 outlines that “in four of the last six years (2017, 2018, 2020, and 2021), California has experienced historically large and costly wildfires with losses well exceeding $65.0 billion.”

The pull-out of State Farm further engineers the reality that climate change is a real-world economic epidemic that must be addressed. Businesses need stability and climate change is making it increasingly hard to get it. As Governor Gavin Newsom remarked after the announcement, “This cannot be the new normal.” With the California Department of Insurance and state legislators working hard to mitigate the risks of wildfires, hopefully, the disastrous losses California has seen in previous years will not be something we’ll have to worry about in the future.