State Farm Makes Major Policy Change Amid La Fires Outrage

For a little over a week, Los Angeles has suffered fires that have so far burned over 12,000 structures and killed at least 27 people. Roughly 200,000 Los Angeles residents have evacuated the affected areas, and thousands of homes have been destroyed as the fires have ripped through 40,000 acres of land so far.

Although the cause of the fires is unknown, weather forecasters claim that high winds, severe drought conditions and low humidity have made the fires exceptionally destructive.

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During this crisis, thousands of Los Angeles residents in fire-prone areas have flagged that they were dropped by their home insurance companies months before the wildfires started, sparking widespread outrage on social media.

Related: Star realtor raises alarm over price gouging amid LA wildfires

Filmmaker Tyler Perry took to Instagram to admonish property and casualty insurance companies in Los Angeles for dropping residents from policies months ago.

“Does anyone else find it appalling that insurance companies can take billions of dollars out of communities for years and then, all of a sudden, be allowed to cancel millions of policies for the very people they become rich on? People who have paid premiums all of their lives are left with nothing because of pure greed,” wrote the filmmaker in a viral Instagram post.

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State Farm, the biggest insurer in California, announced in March last year that it would not renew 72,000 policies for houses and apartments in the Golden State. The company blamed “inflation, catastrophe exposure, reinsurance costs,” and the limitations of working within the state’s insurance regulations as the reasons for the decision.

In July 2024, as part of the decision, State Farm dropped 1,600 policies in the Pacific Palisades. The company also dropped over 2,000 policies in other zip codes in Los Angeles.

State Farm updates a crucial policy amid LA fires

However, it appears that State Farm is switching gears in the midst of the devastating fires and consumer backlash.

In a statement on the insurer’s website, State Farm revealed it is pausing nonrenewals for “homeowners, rental dwelling, and residential community association policies” that were active as of Jan. 7. The policy update applies to all policyholders in Los Angeles.

Related: Home insurance companies secretly spy on customers to deny coverage

“This decision reflects our commitment to supporting our customers and goes beyond the Department of Insurance's request,” said State Farm in a statement on its website. “Our focus is on continuing to meet our customers’ needs and working closely with the State of California to create a sustainable insurance market.”

State Farm claims it has received roughly 7,850 home and auto claims that are associated with the LA fires.

California government sends insurers a stern warning

The move from the insurer comes after California Insurance Commissioner Ricardo Lara requested last week that all insurers suspend pending insurance nonrenewals in fire-zone areas.

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According to a message on the California Department of Insurance’s website, a consumer protection law in the state “requires a mandatory one-year moratorium on insurance companies canceling or non-renewing residential insurance policies in certain areas within or adjacent to a fire perimeter after a declared state of emergency is issued by the Governor.”

State Farm’s nonrenewal update comes after the insurer recently revealed that it will cut its planned Super Bowl ad due to the LA fires.

“Our focus is firmly on providing support to the people of Los Angeles,” said State Farm in a statement to Front Office Sports. “We will not be advertising during the game as originally planned.”

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