State Farm, a prominent insurer in California since 1928, is navigating the state's challenging insurance market. The company supports California's Sustainable Insurance Strategy and efforts by the California Department of Insurance (CDI) to implement it.

Insurance Commissioner Ricardo Lara introduced the Sustainable Insurance Strategy, which aims to reform the insurance industry significantly. State Farm remains committed to working with CDI, the Governor's Office, and policymakers.

The insurance market in California faces a crisis as residents struggle to find adequate coverage for homes and businesses. Inflation, supply chain disruptions, and increased catastrophe exposure contribute to rising costs. Additionally, outdated regulations hinder timely rate adjustments.

"Diminished capital could impact an insurer’s ability to pay future claims," according to State Farm. To address this, State Farm General Insurance Company is pursuing rate revisions and other actions to strengthen its financial position.

Currently, 85% of the market is held by the top 12 homeowners insurers in California. Seven have paused or restricted new business since 2022, while six have plans for non-renewals. Consequently, the FAIR Plan has grown unsustainably to cover 3% of the market.

A modern regulatory environment is necessary for a healthy insurance market in California. Reforms are needed for the FAIR Plan and reinsurance rates should be considered legitimate business expenses when setting rates.

Predictive risk modeling is being explored by regulators as historical data alone no longer suffices for assessing current risks. Efforts continue towards streamlining rate application reviews in California.