State Farm Stopped Writing in California — Here's What Business Owners Should Do

If you're a California business owner or homeowner insured through State Farm, you've probably heard the news — and felt the anxiety that came with it. In 2023, State Farm announced it would stop accepting new applications for business and personal property insurance in California. Since then, non-renewal notices have followed for thousands of existing policyholders, particularly in areas with elevated wildfire risk.

For business owners in the Central Valley and across the state, this raises urgent questions: What happens to my current policy? Where do I go for coverage? Will I end up paying significantly more? And how do I avoid a gap in coverage that could leave my business exposed?

The short answer: you have options — good ones. And the business owners who are acting now, rather than waiting for a non-renewal notice, are finding better coverage at competitive rates. This guide explains exactly what happened with State Farm in California, what it means for you, and the concrete steps you can take right now to protect your business and your property.

What Happened with State Farm in California?

State Farm General Insurance Company — the largest property and casualty insurer in the United States — announced in May 2023 that it would stop accepting new applications for business and personal property insurance in California, effective immediately. This was not a temporary pause. It was a strategic withdrawal from new business in the state's property market.

The decision was attributed to three primary factors:

1. Escalating Wildfire Exposure

California has experienced increasingly severe and costly wildfire seasons. The insured losses from the 2017–2018 wildfire seasons alone exceeded $30 billion, and the trend has continued with devastating fires in subsequent years. Carriers like State Farm determined that the risk-to-premium ratio in many California ZIP codes was no longer sustainable under the premiums they were allowed to charge.

2. Regulatory Constraints Under Proposition 103

Under Proposition 103 (passed by voters in 1988), California's Department of Insurance (CDI) must approve rate increases before they take effect. Insurers have argued that this process is too slow and prevents them from charging premiums that reflect actual wildfire risk. Unlike most other states, California has historically prohibited the use of forward-looking catastrophe models in rate-setting, instead requiring rates based on historical losses — which don't capture the accelerating pace of wildfire damage.

While CDI Commissioner Ricardo Lara has introduced reforms under the Sustainable Insurance Strategy to modernize rate-setting — including allowing catastrophe modeling — carriers have not waited for those changes to take full effect.

3. Rising Reinsurance and Rebuild Costs

Reinsurance costs (the insurance that insurance companies buy to protect themselves) have surged globally. Combined with inflation in construction materials and labor, the cost of backing California property policies has increased dramatically. When carriers can't charge enough premium to cover these rising costs, they reduce their exposure by writing fewer policies — or, in State Farm's case, stopping entirely.

Timeline of State Farm's California Pullback

• May 2023: State Farm announces halt on new homeowners and business property applications in California.

• Late 2023: Non-renewal notices begin for policyholders in high-risk wildfire zones across the state.

• Early 2024: CDI Commissioner announces Sustainable Insurance Strategy, including allowing catastrophe modeling in rate-setting.

• 2024–2025: State Farm continues limited renewal writing; non-renewals expand to additional ZIP codes and policy types.

• 2026 (current): Thousands of California property policyholders are actively shopping for alternatives. State Farm has not resumed writing new business in the state.

For a deeper look at how Proposition 103 affects insurance pricing in California, read our analysis: Proposition 103 and California Auto Insurance.

What This Means for Current State Farm Policyholders

If you currently have a State Farm business or home insurance policy in California, here's what you need to know:

You May Receive a Non-Renewal Notice

State Farm has been issuing non-renewal notices — meaning your policy will not be renewed when it expires. Under California law (Insurance Code §678), carriers must provide at least 75 days' written notice before non-renewing a homeowners policy and at least 60 days for most commercial policies. This gives you time to find alternative coverage, but you need to act promptly rather than waiting until the last minute.

Your Policy Is Still Active — For Now

A non-renewal notice does not cancel your current policy. You remain fully covered until your policy's expiration date. However, once that date passes without a new policy in place, you're uninsured. That's why it's critical to start shopping well before your expiration date — ideally as soon as you receive the notice, or even before.

Your Rates May Have Increased Significantly

Even policyholders who haven't been non-renewed may see steep premium increases at renewal, as State Farm adjusts its pricing to reflect California risk. If you're seeing double-digit percentage increases year over year, it's a strong signal to explore other carriers who may be more competitive for your specific risk profile.

Business Insurance Impact Is Particularly Acute

For commercial policyholders, the impact is especially significant. Business owners who relied on State Farm for their commercial property, general liability, or business owner's policy (BOP) may find that their agent — often a captive State Farm agent — has no other carrier options to offer them. This is the inherent limitation of working with a captive agent: when their one carrier stops writing, they have nothing else to sell you.

This leaves business owners scrambling to find coverage, often under time pressure, and sometimes forced to accept inferior or more expensive coverage because they didn't have alternative options lined up.

Learn more about captive vs. independent insurance agents in California and why it matters now more than ever.

Your Action Plan: What to Do Right Now

Whether you've received a non-renewal notice or you're proactively planning, here are the steps you should take immediately:

1. Don't Panic — But Don't Wait

You have time, but the California insurance market is competitive right now. Carriers that are still writing new business in the state are seeing increased demand, and some are becoming more selective about which risks they accept. Start shopping at least 90 days before your renewal date. If you've already received a non-renewal notice, start today.

2. Switch to an Independent Insurance Agent

This is the single most important step you can take. A captive State Farm agent can only offer State Farm products. When State Farm stops writing, that agent has nothing to offer you — no matter how much they want to help.

An independent agent — like TSM Insurance — works with multiple carriers. We have access to 20+ insurance companies that are actively writing business and home insurance in California right now. That means more options, competitive pricing, and no single point of failure. If one carrier adjusts their appetite, we simply shop you to another one.

Ready to make the switch? Here's our complete guide: How to Switch Business Insurance Agents in California.

3. Gather Your Current Policy Documents

Collect declarations pages, endorsements, and claims history for every policy you have. Your new agent needs this information to shop your coverage accurately and make sure nothing falls through the cracks. Key items include:

• Policy declarations pages (current and expiring)

• All endorsements and policy amendments

• List of scheduled equipment, vehicles, or property

• Claims history for the past 5 years

• Certificates of insurance you're required to maintain for clients, landlords, or lenders

• Lease agreements or contracts that dictate specific coverage requirements

4. Review Your Coverage Needs — Thoroughly

This is actually a silver lining in the situation. Being forced to shop your insurance gives you the opportunity to ensure you're properly covered — something many business owners haven't revisited in years. Have your needs changed since you first bought your policy? Have you added employees, equipment, vehicles, or locations? Are your limits still adequate for your revenue?

Our team at TSM Insurance provides complimentary coverage reviews. We'll evaluate your current program, identify gaps, and recommend improvements. Learn more about our business insurance solutions.

5. Explore All Available Options

The California insurance market, while challenging, still has plenty of carriers writing business. An independent agent will present you with multiple options. In some cases, you may find coverage that's actually better — and less expensive — than what you had with State Farm.

6. Consider the California FAIR Plan Only as a Last Resort

If you're in a high-risk wildfire area and can't find coverage in the standard market, the California FAIR Plan provides basic fire insurance. However, FAIR Plan policies typically offer limited coverage at higher premiums, and they need to be supplemented with a Differences in Conditions (DIC) policy for comprehensive protection. Most business owners will find better options through an independent agent with broad carrier access before needing the FAIR Plan.

Impact on California Homeowners Insurance

While this article focuses primarily on business insurance, State Farm's pullback has hit homeowners equally hard — especially in areas like the Central Valley foothills, Sierra Nevada-adjacent communities, and any ZIP code with elevated wildfire exposure. Many business owners are dealing with disruption on both their commercial and personal insurance at the same time.

If you're also dealing with a State Farm non-renewal on your home insurance, read our detailed guides: Wildfire Insurance for California Homeowners.

You can also explore: Best Home Insurance in California for a comprehensive overview of available carriers.

At TSM Insurance, we handle both personal and commercial lines, so we can address your home and business insurance needs in one conversation. Visit our home insurance page to see how we can help protect your home, too.

Why Independent Agents Are the Answer in California's Changing Market

The State Farm situation has exposed a fundamental problem with the captive agent model. When a captive agent's sole carrier pulls back, their clients are left stranded — often with no guidance and no alternatives.

Independent agents operate differently. Here's why the independent model is better suited for California's volatile insurance market:

• Multiple carriers: We represent 20+ carriers, so if one pulls back, we move your coverage to another — often without any disruption to your business.

• Market competition: We shop your coverage every year to make sure you're getting the best combination of price and protection. You're never locked into a single option.

• Client-first loyalty: We work for you, not for the insurance company. Our job is to find you the best deal, not to sell you one company's product.

• Transition expertise: We handle BOR letters, carrier coordination, COI distribution, and all the paperwork involved in transitioning your coverage. The process is seamless.

We also provide expert guidance on commercial property — see our guide on commercial property insurance in California.

How TSM Insurance Helps State Farm Policyholders in the Central Valley

TSM Insurance is headquartered in Modesto, California, and we serve business owners and families throughout Stanislaus County, San Joaquin County, and the greater Central Valley.

Since State Farm's announcement, we've helped dozens of former State Farm clients transition their coverage seamlessly. Here's what that process looks like with TSM:

1. Free coverage review: We review your current State Farm policies line by line to understand your coverage, identify any gaps or redundancies, and document your exact needs.

2. Multi-carrier quoting: We shop your coverage across 20+ carriers and present a clear, side-by-side comparison so you can see your options at a glance.

3. Seamless transition: We coordinate the exact timing of your new policy to ensure there is no gap in coverage — not even for a single day.

4. Same-day COIs: We issue updated certificates of insurance to your landlords, lenders, clients, and general contractors the same day your new policy binds.

5. Ongoing annual reviews: We schedule your annual review date so you'll never be surprised by a renewal again — and so we can re-shop your coverage every year.

If you need to transfer an existing policy via a Broker of Record letter, we've created a free template: Broker of Record Letter: What It Is + Free Template.

Insurance Carriers Still Writing Business Policies in California (2026)

While State Farm has pulled back, many reputable carriers continue to write new business in California. Through TSM Insurance, our clients have access to carriers including (but not limited to):

• The Hartford

• Travelers

• Nationwide

• CNA

• Employers Holdings (workers' compensation)

• AmTrust Financial

• Guard Insurance (Berkshire Hathaway)

• Markel

• Applied Underwriters

• Zenith National (workers' comp)

Carrier availability depends on your industry, location, claims history, and coverage needs. That's why working with an independent agent who knows the market is so valuable — we know which carriers are writing what, in which ZIP codes, and for which industries.

Frequently Asked Questions

Can I stay with my current State Farm agent if they become independent?

Some State Farm agents have transitioned to independent agencies in response to the pullback. If your agent has done so, they may be able to continue serving you with access to multiple carriers. However, verify that they have active appointments with multiple carriers and aren't still limited in their options. A true independent agent should be able to show you quotes from at least 5–10 different carriers.

Will the FAIR Plan cover my business?

The California FAIR Plan primarily covers fire insurance for properties that can't find coverage in the standard market. It provides limited coverage and typically needs to be supplemented with a Differences in Conditions (DIC) policy for comprehensive protection. It should be a last resort, not a first choice.

Is State Farm coming back to California?

As of mid-2026, State Farm has not announced plans to resume writing new business in California. The regulatory reforms being implemented by CDI may eventually entice carriers back, but there is no firm timeline. Don't wait for a possibility — protect your business with a concrete plan today.

For more on California's changing home insurance landscape, see our article on changing homeowners insurance after California wildfires.

Don't Wait for a Non-Renewal Notice — Get Protected Today

If you're a State Farm policyholder in California — whether for your business, your home, or both — the smartest move you can make is to get ahead of the situation. Don't wait for a non-renewal letter to arrive in your mailbox. Be proactive and explore your options now while you have the most time and the most choices.

Contact TSM Insurance today for a free, no-obligation review of your current coverage. We'll shop your policies across 20+ carriers and show you exactly what's available — often at competitive or lower rates than what you're paying now.

Call our Modesto office or request a quote online. We typically respond within one business day, and your coverage review is always free.

California's insurance market is changing. Make sure you have an agent who can change with it.