State Farm to Reinstate Policies for L.A. Fire Victims

January 15, 2025

State Farm announced it will renew residential insurance policies for many homeowners impacted by recent Los Angeles County wildfires, reversing a previous decision to drop coverage, according to the Los Angeles Times.

The change applies to homeowners, rental property owners, and residential community associations, such as condominium associations. This includes approximately 1,100 policies in Pacific Palisades’ primary 90272 ZIP code—70% of the area’s 1,626 policies—along with thousands more across L.A. County. However, policies that lapsed before the January 7 fire outbreak are excluded.

The California Department of Insurance reported that over 7,600 policies were initially targeted for non-renewal in the Palisades fire zone, with 525 more in the San Gabriel Valley’s Eaton fire zone. State Farm CEO Jon Farney emphasized the company’s commitment to helping affected residents recover, calling the wildfires “a horrible tragedy.”

Earlier this year, State Farm announced plans to cancel 30,000 residential property policies and 42,000 commercial property policies statewide, citing unsustainable risks due to wildfire claims. These cancellations drew criticism, especially after the Pacific Palisades fires, which destroyed over 12,000 structures and claimed more than two dozen lives.

California Insurance Commissioner Ricardo Lara urged insurers to pause non-renewals in fire-affected zones. While Lara expanded a moratorium preventing new cancellations for one year in certain fire areas, existing non-renewals cannot be reversed under current law. For policyholders whose coverage remained active during a total loss, State Farm is required by law to offer two renewals.

The expanded moratorium now includes 22 additional ZIP codes in fire-prone areas, such as Hurst, Lidia, Sunset, and Woodley zones. State Farm’s Bob Devereux confirmed that policyholders in fire zones would receive at least one renewal offer, with total-loss victims qualifying for two.

The company has already received 6,300 residential and auto claims from the wildfires, marking its largest-ever wildfire disaster. While damages could exceed $200 billion—potentially surpassing Hurricane Katrina—Farney stressed the importance of managing risk to maintain financial stability. “Our decisions aim to ensure we can uphold our promises,” he explained.

This policy reversal highlights ongoing efforts to balance risk management with providing support to communities devastated by natural disasters.