Washington Examiner
State Farm canceled hundreds of homeowners’ insurance policies for residents in many of the same areas now in the path of the Southern California wildfires.
The insurance company’s reasoning for canceling policies for people living in Pacific Palisades in Los Angeles County, California, was due to elevated concerns associated with an increase in the frequency and magnitude of wildfires in the state, according to Newsweek.
The decision was announced in March, claiming it would cancel 72,000 property policies in California, 30,000 of which were home insurance policies, the Los Angeles Times reported. The cancellations went into effect over the summer. Around 1,600 homes in Pacific Palisades were victims of State Farm’s policy cancellations.
The insurance company’s decision was deemed a necessary business strategy to prevent “financial failure” allegedly due to California state laws that prevented companies from raising premiums to match the elevated risk, Newsweek reported.