State Farm stops accepting homeowners insurance claims in California: ‘Tough place to do business’

Tech and real estate entrepreneur Peter Rex reacted to State Farm’s decision to cease homeowners insurance claims in California, predicting there was an “unspoken reason” the company made its decision. Rex joined “Fox & Friends Weekend” to discuss why he doesn’t “fully” accept the idea that the company made the move for economic reasons.

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PIERRE REX: That’s a big deal, and I also think…think State Farm, I read their release on their own website just to go straight to the horse’s mouth here, and I don’t completely buy it…The reasons they give are all reasons that are cost reasons… Inflation costs, catastrophic events, rising reinsurance costs. All of these things can be passed on to the consumer through the insurance company…I would say one of our technology companies is an insurance technology company, and we’re still licensed in California, where we do business as well. And I had run a real business and also lived in California and San Francisco before moving to Texas. And I think the excuse here, these other reasons, there are real reasons, but I think there’s an unspoken reason here, and that reason is that California is a very difficult place to do business. And I bet State Farm said, you know what, we’re done with that. We’re going to go ahead and step aside and we’re going to give reasons that are… generally acceptable and true and legitimate, but we’re not going to state the reason why California just makes it a very hard place to exploit for a business.

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The State Farm General Insurance Company will no longer accept new applications for property insurance and other policies in Californiaciting “historic” increases in construction costs and inflation,” the company said on Friday.

Starting Saturday, the Illinois-based insurance group will stop accepting claims for property and casualty insurance from businesses and individuals. Moving does not affect personal vehicle insurance.

“State Farm General Insurance Company made this decision due to historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure and a challenging reinsurance market,” the company said in a statement. a statement. “The Department of Insurance is focused on keeping our homes and communities safe.”

THE insurance company these actions are necessary to improve its financial solidity. State Farm agents in California will continue to serve existing customers, he said.

A spokesperson for the California Department of Insurance told Fox Business that it is committed to protecting its customers.

“The factors driving State Farm’s decision are beyond our control, including climate change, reinsurance costs affecting the entire insurance industry, and global inflation,” the spokesperson said. .

California has some of the most expensive housing costs in the country amid a shortage that many believe has exacerbated the statewide homelessness crisis. The state plans to spend about $30 million to build 1,200 tiny homes.

Louis Casiano of FOX Business contributed to this report.

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