"State Farm said it would stop selling new insurance policies to homeowners in California, exacerbating troubles for thousands in the wildfire-prone state, who are already feeling the heat with coverage getting costlier or harder to come by.

State Farm General Insurance Company - State Farm's provider of homeowners insurance in California - said on Friday that it made this decision due to "historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market."

The insurer said it was necessary to take these actions now to improve the company's financial strength.

Homeowners who have lost their home cover can purchase a policy from the California FAIR Plan, a high-risk, privately run insurance pool established under California state law."

Noor Zainab Hussain reports for Reuters May 30, 2023. [2]