The California insurance market shaken by the withdrawal of the main companies

LOS ANGELES (AP) — Two insurance industry giants have pulled out of the California home insurance market, saying the increased risk of wildfires and rising construction costs have led them to stop issuing new policies in the state. most populous in the country.

State Farm announced last week that it would stop accepting applications for all commercial and personal lines of property and casualty insurance, citing inflation, a challenging reinsurance market and “rapidly growing catastrophe exposure.” The decision did not affect personal auto insurance.

“We take our responsibility to manage risk seriously,” State Farm said. “These steps need to be taken now to improve the financial strength of the company.”

Allstate, another insurance powerhouse, announced in November that it would pause new homeowners, condominium and commercial insurance policies in California to protect existing customers.

“The cost of insuring new home customers in California is much higher than what they would pay for the policies due to wildfires, higher home repair costs and higher reinsurance premiums,” Allstate said in a statement.