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Major insurer stops offering coverage to new homeowners in wildfire-ridden California: 'Every company matters'

"The homeowners' insurance environment in California has unique challenges."

"The homeowners' insurance environment in California has unique challenges."

Photo Credit: iStock

Rampant wildfires in California have led one major insurer to limit how many homes it is willing to insure in the Golden State, Scientific American reported. 

The decision fits into a growing trend of insurers pulling out of areas that are especially affected by the changing weather patterns that have resulted from human-caused pollution.

What's happening?

The Hartford Financial Services Group said that, starting in February, it will no longer offer new policies to California homeowners. The company accounts for less than 1% of the state's homeowner policies, but in a state the size of California (population: 39 million) that's still a lot of people.

"Every company matters in a market as large as California's, with as many consumers as we have," said Michael Soller, a spokesperson for the California Department of Insurance.

"The homeowners' insurance environment in California has unique challenges that have required us to reconsider the viability of writing new homeowners' business in the state," a Hartford spokesperson wrote in an emailed statement. The statement seemed to reference the wildfires that have grown more common and widespread in California in recent years.

Why is this concerning?

The Hartford Financial Services Group is by no means the first insurance company to cut off an entire state due to climate crises like wildfires and flooding — and it's also not the biggest one.

State Farm, the largest insurance provider in California, recently announced that it would not be renewing coverage for approximately 72,000 homes and apartments. Farmers Insurance joined several other companies recently in pulling out of Florida, which has been hit hard by destructive hurricanes and storms.

Even when companies don't pull out, climate disasters are allowing the companies to raise their rates to untenably expensive levels. A study from 2023 showed that 12 million properties were about to see premium hikes because of the risk of flooding, 24 million because of potential wind damage, and about 4.4 million because of wildfire risk.

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The message that these companies are sending is clear: When the extreme weather events fueled by our society's reliance on dirty energy sources come for your home, it will be the individual homeowners and renters — not large corporations — who are left holding the bag.

What's being done about it?

To prevent future extreme weather events and protect our homes (and our wallets from insurance companies), we must embrace sources of clean energy — like wind and solar — and leave dirty energy sources like gas and oil in the past.

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