State Farm General Insurance Company announced Wednesday that it plans to non-renew 30,000 property insurance and 42,000 commercial apartment policies in California.
The 42,000 commercial apartment non-renewals represent a complete withdrawal from the commercial apartment market in California. The other 30,000 non-renewals would impact homeowners, rental dwellings, and other property insurance policies, according to State Farm.
The announcement applies to California customers only. The company said those impacted will be notified between July 3 and Aug. 20.
So, what should State Farm customers do if the company’s latest announcement impacts their policy?
Here’s what insurance experts recommend:
- Customers should shop for another insurance policy by asking for recommendations from trusted sources or seeking an independent insurance agent.
- Utilize the California Department of Insurance shopping tools available on their website.
- Compare multiple policies, shop smart and choose the best coverage that suits your needs.
- Call the state’s insurance consumer hotline at 800-927-4357.
- Buy insurance through the California Fair Plan if you strike out in the normal marketplace.
Regardless of the latest announcement, State Farm said that it will continue working with the Department of Insurance, Gov. Gavin Newsom and other policymakers as they pursue reforms “to establish an environment in which insurance rates are better aligned with risk.”
In February, the state’s insurance department announced proposals to reform California’s insurance regulations. The new proposal would allow insurance companies to switch from using historical data to catastrophe modeling, meaning companies would calculate projections of future risk when raising rates and pass on the cost of reinsurance to consumers.
The new changes are expected to take effect at the end of the year.
Last year, State Farm announced it would stop accepting new insurance applications for all business and personal property in California.
Since then, other companies like Allstate have announced similar moves.