Guides
Why insurers are pulling out of states
Insurers restrict or exit home insurance markets when catastrophe losses, reinsurance costs and slow rate approval outrun premiums. How it played out by state.
Insurers pull back from a state when what they can charge no longer covers what they expect to pay, and they cannot raise prices fast enough to close the gap. Three forces do most of the work: catastrophe losses that arrive in clusters, the cost of the reinsurance that backs the insurer, and rate regulation that approves increases more slowly than costs rise. The exit is rarely a clean departure. It usually starts as a pause on new business and ends, if it ends, in nonrenewals.
This guide explains the mechanics, then walks through what actually happened in California, Florida, Louisiana and a few other states, with dates. For the individual-homeowner side, see why insurers drop homeowners: the real reasons behind nonrenewals.
What "leaving" means
Insurers use several levers before they leave a state entirely.
| Step | What it looks like to you |
|---|---|
| Pause new business | You can still renew, but you cannot buy from that company in the state |
| Tighten underwriting | Roof-age limits, higher deductibles, wind or hail exclusions at renewal |
| Block nonrenewals | A defined group (a ZIP code, a roof type, a home age) gets nonrenewal letters at once |
| Withdraw a brand or line | One company brand stops writing homeowners while an affiliate may continue |
| Full market exit | Notice to the regulator and nonrenewal of every policy, with state-required notice periods |
Most "exits" are the first three. A company that says it is "pausing" new applications in a state has not left it, and policyholders there are not necessarily losing coverage.
The three economic forces
Catastrophe losses that cluster. A homeowners insurer collects premiums every year and pays a few very large losses. When wildfire, hurricane or severe convective storm losses repeat in a few years, the cushion of prior profit runs out. AM Best calculated a $15.2 billion U.S. homeowners underwriting loss for 2023, the worst this century, and the Insurance Information Institute's table of NAIC data shows a 110.9% combined ratio that year. See combined ratio for why that number matters.
Reinsurance costs. Insurers buy reinsurance to cover the tail of a catastrophe, and its price swings feed directly into premiums. AM Best said property catastrophe reinsurance pricing "reached its peak in 2023" and began softening in 2024. The relief since has been large in Florida: reinsurance price reductions were roughly 10% at the June 1, 2025 renewals and roughly 15% to 25% at June 1, 2026, according to the reinsurers' own reports cited by trade press. That is a big reason the market there is easing. reinsurance costs and your premium covers the pass-through.
Slow or restricted rate approval. In prior-approval states, a rate cannot take effect until the regulator approves it, and the cost data insurers may use is limited. California is the clearest case. For about 30 years its rates used a wildfire catastrophe factor based on historical losses and could not include the cost of reinsurance. Insurers argued the formula understated the risk and that approval took too long. That is the premise of the state's Sustainable Insurance Strategy, discussed below. Regulators and consumer advocates dispute how much of the problem is regulation: they point to insurers' choices on where to grow and on pricing, and to the need for approval of increases that bill customers for company-level costs.
California
California is the clearest example of a market where companies stopped writing before they left.
- Allstate stopped writing new residential policies in 2022, according to the California Department of Insurance (CDI). On August 31, 2026 it filed a homeowners rate plan under the new framework that CDI said signals a return; it is not yet open for new business.
- State Farm General announced on May 26, 2023 that it would stop accepting new applications for property and casualty lines in the state, effective May 27, 2023, citing construction costs, catastrophe exposure and reinsurance. On March 20, 2024 it announced nonrenewals of about 30,000 homeowners and other property policies starting July 3, 2024, plus about 42,000 commercial apartment policies.
- After the January 2025 Los Angeles fires, CDI reported about $25.2 billion paid on 41,727 claims as of July 6, 2026. State Farm was given an emergency interim 17% homeowners rate increase in May 2025 on the condition that it make no new block nonrenewals through 2025, and agreed in the March 2026 settlement to no new block nonrenewals in 2026.
- Farmers says it never stopped writing in California. It raised a monthly new-policy commitment to 9,500 in December 2024 and removed the cap in November 2025.
The state's Sustainable Insurance Strategy let insurers use catastrophe models and include reinsurance costs in rates, in exchange for writing in distressed wildfire areas at a share set at 85% of their statewide market share or in stepped 5% increments. The first rate filings under it were approved in December 2025. The effect on homeowners has been a growing FAIR plan: the California FAIR Plan held 696,562 policies in June 2026, up 157% since September 2022. See The California FAIR Plan explained.
Florida
Florida's problem looked different. Insurers there did not so much pull out as fail. DFS records show nine Florida-domiciled property insurers ordered into liquidation between October 2019 and February 2023, including St. Johns, Southern Fidelity, FedNat and United Property & Casualty. Those insolvencies triggered guaranty fund assessments and sent policyholders to Citizens, which grew to 1,407,805 policies by September 2023.
On July 10, 2023 Farmers filed a market reduction notice to discontinue Farmers-branded auto, home and umbrella policies in Florida, although its other brands, such as Foremost, continued.
The Legislature responded with reforms: the end of assignment of benefits for policies issued on or after January 1, 2023, an end to one-way attorney fees for property suits in December 2022, and a claim-handling deadline overhaul. The market has since recovered. Florida's Office of Insurance Regulation said on May 20, 2026 that 20 new property insurers have entered since the reforms, and Citizens fell to 254,736 policies by October 2, 2026 as private companies took policies out. See Citizens Property Insurance in Florida: who qualifies and what to know and the Florida state guide.
Louisiana
Louisiana had a run of insolvencies after the 2020 and 2021 hurricanes. The state guaranty association reports eleven property insurer insolvencies between April 2021 and February 2023, a record for that fund. A Senate Budget Committee staff report in December 2024 said nearly 20 companies had pulled out of Louisiana's market in the preceding two years, a secondary citation that should be treated as approximate. State data shows more recent improvement: Triple-I reported in July 2026 that 17 new insurers had entered Louisiana's homeowners market since 2024 and homeowners rate growth slowed to 4.6% in 2025 from 10.4% in 2023. Louisiana Citizens is the residual market (Louisiana Citizens Property Insurance explained).
Other states and lines
The Senate Budget Committee report, using data from 23 insurers, found 2023 nonrenewal rates highest in Florida (2.99%), Louisiana (1.80%), North Carolina (1.79%) and California (1.72%), followed by Massachusetts, Mississippi, Oklahoma, Rhode Island, Connecticut and Hawaii. Progressive announced in November 2024 that it would exit the dwelling fire line for rental properties, with approval in 22 states. Exits in other states are reported in the trade press more often than they are filed in regulatory records, so check your state department of insurance rather than relying on a headline.
What this means for you
If your insurer announces it is leaving or restricting your state:
- Confirm what is actually ending: new business, one brand, or your policy.
- Find your state's notice rules in the state guide or home insurance rules by state. After declared disasters some states, notably California, impose moratorium periods; see disaster moratoriums on cancellations and nonrenewals.
- Ask an independent agent which carriers are writing in your ZIP code now. New entrants are often open to business the old national names are not.
- Keep the state plan as a fallback, not a plan.
Key takeaways
- Exits come from catastrophe losses, reinsurance costs and regulatory limits on rates, usually in combination, and most start as new-business pauses.
- California's pullbacks (Allstate 2022, State Farm 2023) led to a state reform package and a FAIR Plan of 696,562 policies by June 2026.
- Florida's insolvencies from 2019 to 2023 gave way to reform, falling reinsurance prices and a Citizens policy count that dropped below 255,000 by October 2026.
- National nonrenewal rates rose between 2018 and 2024, with the highest rates in wind and wildfire states.
- Check the notice rules and available carriers for your state before assuming a headline applies to your policy.