State Farm and Allstate have decided to stop selling new home insurance policies in California. The reason? They’re worried about the risks of wildfires and the rising costs of construction. Here’s what is going on. 

State Farm and Allstate are worried about the risks of wildfires and rising costs of construction in California.  As a result, they decided to stop selling new home insurance policies in California. They’re still going to take care of their current clients, renewing their policies and even offering new auto insurance. But when it comes to new property insurance, they’re hitting the pause button for now.

What should you know if you want to buy a home in California?  Well, in some high-risk areas, there aren’t many insurance companies willing to take on new policies. In fact, in some of these areas, State Farm was the last private insurer in the game. But remember, just because they’ve made this decision doesn’t mean other companies will follow suit. There are still plenty of companies writing policies in California. But the number of those willing to take on new policies in high-risk areas is dwindling. With State Farm and Allstate stepping back, those in high-risk areas might be left with the California FAIR plan, which usually comes with a higher price tag.

The California Dept. of Insurance has a bunch of guides, tips, and tools to help people understand the ins and outs of home insurance. You can also call the California Dept. of Insurance Consumer Hotline for help.  Both the Insurance Industry and the Department of Insurance are brainstorming ways to tackle the state’s insurance challenges. It’s a big, complex issue, but we’re cautiously optimistic that these moves might spark some urgency to address the insurance situation.