Strong Santa Ana winds and drought conditions have led to a number of devastating fires in and around Los Angeles this week, including one in the Pacific Palisades neighborhood that has been described as one of the most destructive natural disasters in Los Angeles history.
Some people on social media have expressed outrage after viral posts on social media claimed insurance company State Farm “canceled hundreds of homeowners’ policies last summer in Pacific Palisades.”
THE QUESTION
Did State Farm end homeowners’ insurance coverage last year in the Pacific Palisades neighborhood?
THE SOURCES
THE ANSWER
Yes, State Farm did end homeowners’ insurance coverage last year in the Pacific Palisades neighborhood.
WHAT WE FOUND
On March 20, 2024, State Farm announced it wouldn’t renew 30,000 homeowners’ insurance policies in California, including more than 1,000 policies in Los Angeles’ Pacific Palisades area. State Farm said the nonrenewals would occur on a rolling basis over the year, beginning on July 3, 2024.
State Farm listed “catastrophe exposure” as one of the reasons it was not renewing the policies.
“In recent years, the number of acres burned in California has been increasing, and more people are moving into areas prone to fires,” State Farm said in an October update. “This means that when extreme weather events like wildfires happen, the damage can be more costly due to the higher number of people, homes and businesses at risk.”
In a filing to California state officials, State Farm reported that it wasn’t renewing 69.4% of policies, equal to 1,626 policies, in the 90272 zip code, which is the zip code for the Pacific Palisades area of Los Angeles. That was State Farm’s highest rate of nonrenewals for any California zip code where it had at least five policies.
State Farm isn’t alone in canceling policies for Californians, particularly those in fire-prone areas. In 2023, California had the fourth highest rate of insurance nonrenewals of any state, according to a report from the Senate Budget Committee. The three states with higher rates — Florida, North Carolina and Louisiana — have all been recently affected by frequent strong hurricanes.
Since 2017, insurance companies in California have frequently opted not to renew policies due to wildfire risk, Rex Frazier, president of the Personal Insurance Federation of California (PDIC), told VERIFY in June 2023.
That doesn’t mean all of those homeowners were not without insurance. A California state program offers insurance coverage to homeowners as the insurer of last resort if private insurers will not offer them plans.
The California FAIR Plan will insure a property regardless of fire risk to ensure all Californians have access to insurance, but is designed to be a temporary safety net until coverage from a traditional insurer becomes available.
FAIR Plan data shows that many people in the Pacific Palisades switched to the FAIR Plan in 2024. Between Sept. 30, 2023, and Sept. 30, 2024, FAIR policies in the 90272 zip code increased from 773 to 1,430.
In December 2024, Ricardo Lara, California’s insurance commissioner, issued a new policy that included a requirement for insurers to increase coverage in “wildfire distressed areas.”
And on Jan. 8, 2025, Lara said he would put a temporary hold on insurers not renewing policies for people in the current fires’ vicinity. California’s Department of Insurance regularly puts these holds on nonrenewals for people affected by wildfires, including for 1 million policies last year.