mobanmarketLOS ANGELES — Property owners in some of the Los Angeles area’s most affluent communities will not be allowed to renew their State Farm insurance policies, according to documents published by KTLA listing the zip codes affected by the company’s upcoming 72,000 nonrenewals.
California’s largest insurer announced the nonrenewals last month, which include about 30,000 homeowners, rental dwelling and other property insurance policies as well as around 42,000 commercial apartment policies.
“This decision was not made lightly and only after careful analysis of State Farm General’s financial health, which continues to be impacted by inflation, catastrophe exposure, reinsurance costs, and the limitations of working within decades-old insurance regulations,” the company said in a news release at the time.
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Among the zip codes with the most affected policies were 90049 (Brentwood and Crestwood Hills) with 1,301 nonrenewals or 61.5 percent, 90272 (Pacific Palisades) with 1,626 or 69.4 percent and 91302 (Hidden Hills and Calabasas) with 1,090 or 60.4 percent, the documents showed.
About 700 customers in Beverly Hills, 518 in Malibu, 150 in La Canada Flintridge, about 300 in Agoura Hills, 134 in Pasadena, and 665 in Bel Air will also be affected.
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In the Bay Area, some of the most-affected zip codes included 94563 (Orinda) with 1,703 nonrenewals or 54.7 percent and 95033 (Lexington Hills) with 1,035 or 65.2 percent, according to the documents.
In a letter to California Commissioner of Insurance Ricardo Lara, State Farm noted recent windstorms, increasing non-catastrophe water loss and liability claims, and construction inflation, remarking the company’s policyholder surplus dropped from $4.1 billion in 2016 to $1.3 billion in 2023.
The nonrenewals will start during the summer and represent just over 2 percent of the company’s policies in California.
The move comes as Lara undertakes a yearlong overhaul of home insurance regulations aimed at calming the state’s imploding market by giving insurers more latitude to raise premiums while extracting commitments from them to extend coverage in fire-risk areas, according to the Bay Area News Group.
Last June, State Farm said 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 Associated Press contributed to this story.
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