State Farm Just Pulled Out of the Home Insurance Biz in California

This is the business of climate change, and it’s bad

4 min readMay 30


Photo by Dave Hoefler on Unsplash

Actually they are no longer issuing policies for new homes. In a state with a chronic housing shortage and a median (not average) house price of $850,000, buying a first home or building one could become almost impossible without significant cash. Banks don’t issue mortgages on homes without insurance.

State Farm probably won’t be the only major insurer to pull out of the state. All the insurers use actuarial tables to judge their exposure to risk and once a big one decides it’s too high the others are likely to follow in rapid succession.

This could be the start of a domino effect in areas of the country prone to climate-driven disasters. All the major companies have pulled out of Florida and many whose homes were destroyed in Hurricane Ian are having a hard time getting checks out of the smaller insurers who are left.

And there are stories of independent insurance adjusters having their estimates slashed with no explanation, which may be a crime. Buyer beware.

We have a rebuilding problem and it’s growing. The forest fires that are a primary reason for insurers pulling out in California are not going away. Years of mismanagement and insect infestations moving north as things warm, are leaving huge numbers of dead standing trees and brush. Add in the recent drought years, strong dry winds, and the formula for fires is virtually unstoppable.

And any Californian will tell you that there’s a cycle: a forest burns, the soil becomes unstable because the plants are not there to hold it together, you get one of the periodic deluges, aka climate rivers, and that soil collapses in mud slides, wrecking more homes and things like roads and bridges.

At least California politicians are less likely to pretend climate change is not a calamity, unlike their Florida counterparts who know how bad it is but are addicted to growth at any cost. But they are not paying the bills. We are.

None of this is a US phenomenon, it’s called global warming for a reason. But the forces of denial are extraordinarily well-funded going back decades as big oil started buying…




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