Saying the company’s top priority is to its current customers, State Farm has put a moratorium on issuing homeowners’ policies in California until further notice.
“We’ve been facing some real financial challenges with the homeowners company (State Farm General) in the state,” State Farm spokesman Bill Sirola commented. “As was apparent at the beginning of the year when A.M. Best downgraded the rating of the company and when Standard & Poor’s placed it on Credit Watch, we’re facing some challenging times with finances. We’ve been reviewing options and looking at internal operations. Our first and primary obligation is to our existing customers, so we felt it best to close off accepting any new customers until the company regains the kind of financial strength we would like.” State Farm has approximately 1.5 million customers with homeowners insurance in the state.
“This was a management decision and it has been under review since last year,” Sirola continued. “We knew the financial results of General were deteriorating and knew that steps would have to be taken at some point. We have been filing for rate increases, and felt on behalf of our customers, this was the best option we had available. We’re still rated B+ by Best, meaning we’re still a fundamentally solid company. It has no impact on our current customers.”
Topics Homeowners
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