California wildfire backlash: State Farm, other insurers slammed for dropping coverage

The deadly wildfires that hit Southern California this week destroyed a significant number of homes after some leading insurance companies pulled back on offering policies in the Golden State in recent years due to the rising risks of wildfires as well as a challenging regulatory environment.

Several ongoing wildfires, including the Palisades Fire and Eaton Fire, have devastated communities in the Los Angeles area, including Pacific Palisades and Altadena. The fires have burned nearly 30,000 acres amid a Santa Ana wind event, with at least 130,000 people in the area under evacuation orders. At least five people have been killed in the blazes, and more than 1,000 buildings have been destroyed.

State Farm, the largest home insurance company in California, announced in March 2024 that it would discontinue coverage of 72,000 home and apartment policies in the summer. The company cited inflation, regulatory costs and increasing risk of catastrophes for its decision and had previously stopped accepting new applications in the state.