Is Your Home Insurance Company Leaving Your State?

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As inflation drives up construction costs and climate change makes natural disasters more common and potent, homeowners insurance companies are limiting the number of policies they sell in more than 20 states and, in some cases, withdrawing from those states completely, leaving affected homeowners without coverage.

Keep reading to learn more about home insurance companies leaving states including which states are bearing the brunt of the ongoing insurance crisis and what you should do if your insurance company cancels your policy.

Key Takeaways

  • California and Florida have had the greatest number of insurance companies leave or become insolvent but multiple insurers have also stopped providing coverage in states like Louisiana and South Carolina.
  • Another 20 states have seen insurers cancel or decline to renew a large number of policies or withdraw from specific high-risk areas.
  • The insurance crisis is largely influenced by inflation and the fact that natural disasters are becoming more common and powerful, making it harder for insurance companies to make a profit in numerous states.
  • If your home insurance company exits your state, you may have to seek coverage from a nonstandard insurance provider or your state’s insurer of last resort.

Which States Are Insurance Companies Dropping Out Of?

Up to now, California and Florida have seen the largest exoduses of home insurance companies. Insurers like Lemonade, Farmers Direct, AmGUARD and Falls Lake Insurance have withdrawn from California completely, while others like State Farm, Liberty Mutual, Allstate, AIG and Chubb have stopped selling certain types of policies in California.[1][2][3][4][5][6]

Meanwhile, AAA nonrenewed some of its home and auto insurance policies, Farmers Insurance stopped selling Farmers-branded policies and AIG stopped selling coverage through Lexington Insurance in Florida.[7][8][9] In total, six Floridian insurance companies became insolvent and more than a dozen others paused selling new policies or stopped doing business altogether in Florida in 2022.[10]

Some other states have similarly had multiple insurance providers exit the market in recent years. For example, between 2020 and 2022, 11 home insurance companies in Louisiana became insolvent while 11 others — including AIG — left the state.[11] In addition, more than 12 insurance carriers in South Carolina became insolvent from 2021 to 2023, while another six opted to exit the state entirely.[12]

Are Other States At Risk?

While most other states haven’t experienced total departures of major insurance carriers, some states have experienced mass nonrenewals and other problems that could signify an impending homeowners insurance crisis. For example, Nationwide nonrenewed 10,000 policies in North Carolina in 2023.[13]

Other states where home insurers have substantially scaled back include Colorado, Oregon, Arizona, Nevada, Washington, Virginia, Arkansas, Minnesota, Oklahoma, South Dakota, Iowa, Utah, Pennsylvania, Illinois, Indiana, Wisconsin, Ohio, Michigan and Texas.[13][14][15][16]

Why Are Home Insurance Companies Leaving States?

Climate change and inflation are two of the biggest factors causing insurance providers to leave states. Insurers have had to pay out more home insurance claims in several regions as extreme weather events have become more common and have had to spend more money per claim as these storms have become more severe and caused more damage. Similarly, rising construction costs due to inflation mean insurers have to dish out massive amounts of money whenever a natural disaster causes widespread damage.

Additionally, many states require carriers to receive approval from the state government before hiking insurance rates above a certain percentage. As a result, selling insurance can cease to be profitable in certain disaster-prone areas if insurers cannot raise their rates enough to offset the cost of paying out claims, which could prompt affected insurers to leave those areas.

All other factors aside, a large number of policyholders can be affected in some cases simply because an insurance company decides to change its business model. For example, Kemper began the process of terminating all of its standard home and auto insurance policies in 2023 in order to focus on selling life insurance and high-risk car insurance.[17]

State-Specific Factors

Of course, there are often state-specific factors that may influence homeowners insurance companies to leave a state, ranging from the specific natural disasters that are common in that geographic region to other economic and political factors. See the below table for a state-by-state rundown of the main factors causing insurers to leave or terminate policies.


Primary Contributing Factors


Increased prevalence of wildfires[13]


Increased wind and hail damage, rising reinsurance prices[18]


Inflation and rising construction costs[2], increased damage from wildfires[19], state law requiring insurers to cover mudslides and other often-excluded perils if they are caused by wildfires[20]


Significant wildfire damage in 2020 and 2021[21], significant spike in construction costs in 2022[22]


Rise in roof claims and other types of hurricane damage[9], excessive litigation[10], rising reinsurance prices[23]


Increased frequency and severity of storms[15]


Increased frequency and severity of storms[15]


More wind and hail damage from storms[15]


Substantial hurricane damage in 2020 and 2021[11]


Increasingly erratic weather[15]


Significant wind and hail damage, inability of insurers to raise rates by more than 25% without potentially triggering a public hearing[24]


Increased prevalence of wildfires[13]

North Carolina

Hurricane damage near the coast[13]


High number of claims related to storms like tornadoes and hailstorms[25]


Inflation, higher volume of claims, competitive market conditions[14]


Increased prevalence of wildfires[13]


Increasingly erratic weather[15]

South Carolina

Increased natural disaster risk, higher rebuilding costs, reinsurance rate hikes[12]

South Dakota

Inflation, higher volume of claims, competitive market conditions[14]


Growing intensity of storms such as hurricanes and winter storms[16]


Increased prevalence of wildfires[15]


Rainstorm damage near the coast[26]


Increased prevalence of wildfires[13]


Increased frequency and severity of storms[15]

What Should You Do if Your Insurance Company Leaves Your State?

If you hear that your insurance company is planning on leaving your state, you should first contact an agent from the company to clarify whether your home insurance will be canceled. Your insurer may only be putting a moratorium on underwriting new policies in your state, in which case your existing policy may still be renewed.

Generally, insurance companies must give you advance notice of about one to three months before nonrenewing your policy depending on where you live.[27] So, if you do receive a nonrenewal notice, you should have time to shop for a new policy before your current coverage ends.

How To Get Coverage if Your Insurance Carrier Drops You

The best way to find a new homeowners insurance policy is to compare quotes from multiple insurance carriers to make sure you’re getting the best deal on the coverage you need. However, you’ll need to be ready to share quite a bit of information with each insurer you request a quote from including your address, the age of your home and the number of people living in your household.

For a more streamlined process, consider shopping through SmartFinancial’s online insurance marketplace platform. After taking a few minutes to fill out a questionnaire, you can be connected with agents who can help you find the best policy for your needs and budget. Click here if you’d like to compare home insurance quotes from multiple carriers through SmartFinancial.

Keep in mind that, if your previous insurer dropped you because your property became riskier to cover, you may have a hard time finding coverage from standard insurers and may have to shop from companies that specialize in insuring high-risk properties. If all else fails, many states have an insurer of last resort set up by the state government that may be able to cover you. However, insurers of last resort tend to charge high premiums for little coverage, so you should try to exhaust all your options on the private market first.

Shop for Affordable Homeowners Insurance Today!


Will you be penalized if your insurance company drops you?

You likely won’t have trouble finding a new company to cover you if your current insurer decides to change its product offerings or otherwise drops you due to factors that are unrelated to the risk of insuring your property. However, you could struggle to find a new policy if you were dropped for filing too many claims or because your property became too risky to insure due to an increase in the prevalence of natural disasters in your area.

Is there a grace period to get home insurance?

You may be eligible for a grace period before your homeowners insurance coverage is canceled if your policy lapses because you missed a premium payment but this can vary depending on your state and insurance company.

Are you required to have homeowners insurance?

Homeowners insurance isn’t required by law but it is usually required by your lender for as long as you are paying off your mortgage and may also be required by your homeowners association.


  1. S&P Global Market Intelligence. “Lemonade Presses Pause in California; CEO Cries Foul on Rate Hikes.” Accessed May 22, 2024.
  2. San Francisco Chronicle. “California Home Insurance Exodus Continues as Farmers Direct Exits.” Accessed May 22, 2024.
  3. North Bay Business Journal. “2 More Carriers Stop Insuring California Homeowners.” Accessed May 22, 2024.
  4. California Department of Insurance. “Consumer Alert on State Farm’s Decision.” Accessed May 22, 2024.
  5. California Globe. “Liberty Mutual Latest Insurance Company To Terminate Policies in CA.” Accessed May 22, 2024.
  6. San Francisco Chronicle. “Allstate Has Quietly Stopped New Home Insurance Policies in California.” Accessed May 22, 2024.
  7. Associated Press News. “After Devastating 2022 Hurricane Season, AAA Not Renewing Some Insurance Policies in Florida.” Accessed May 22, 2024.
  8. ClickOrlando. “Farmers Becomes Latest Company Pulling Out of Florida Amid Property Insurance Crisis.” Accessed May 22, 2024.
  9. Insurance Journal. “Lexington Insurance Pulling Out of Florida, Other Markets for High-End Homes.” Accessed May 22, 2024.
  10. Insurance Information Institute. “Trends and Insights: Addressing Florida’s Property/Casualty Insurance Crisis,” Pages 1-2. Accessed May 22, 2024.
  11. “Here Are the Louisiana Insurers That Have Gone Broke or Left the State Amid Deepening Crisis.” Accessed May 22, 2024.
  12. WPDE. “Grand Strand Home Insurance Rates Soar; Why a Perfect Storm of Factors Are To Blame.” Accessed May 22, 2024.
  13. Context News. “Climate Change-Driven Insurance Crisis Threatens New US States.” Accessed May 22, 2024.
  14. Insurance Business America. “Tens of Thousands Hit as Yet Another Insurer Looks To Leave State.” Accessed May 22, 2024.
  15. The New York Times. “Homeowners Face Rising Insurance Rates Amid Costly Climate Change Disasters.” Accessed May 22, 2024.
  16. E&E News by POLITICO. “Growing Insurance Crisis Spreads to Texas.” Accessed May 22, 2024.
  17. Insurance Business America. “Kemper Exits Preferred Home and Auto Insurance.” Accessed May 22, 2024.
  18. Arkansas Senate. “Legislators Search for Solutions to Rising Property Insurance Rates.” Accessed May 22, 2024.
  19. NASA Earth Observatory. “What’s Behind California’s Surge of Large Fires?” Accessed May 22, 2024.
  20. California Department of Insurance. “Formal Notice to Insurers on Proximate Cause,” Page 1. Accessed May 22, 2024.
  21. Colorado Division of Fire Prevention and Control. “Historical Wildfire Information.” Accessed May 22, 2024.
  22. Colorado Department of Transportation. “2023 Construction Cost Index Quarter 4,” Page 6. Accessed May 22, 2024.
  23. Insurance Information Institute. “Trends and Insights: Florida Homeowners’ Insurance Crisis,” Page 2. Accessed May 22, 2024.
  24. Star Tribune. “Ramstad: More Storms, Higher Costs Pose a Threat to Minnesotans and Property Insurers.” Accessed May 22, 2024.
  25. WHIO TV7 and WHIO Radio. “Major Home Insurance Companies Pull Out of Some States Due to High Risk — Is Ohio Next?” Accessed May 22, 2024.
  26. WTKR. “More Insurance Companies Predicted To Drop Va. & N.C. Customers, Experts Say.” Accessed May 22, 2024.
  27. Consumer Financial Protection Bureau. “Consumer Advisory: Take Action When Home Insurance Is Cancelled or Costs Surge.” Accessed May 22, 2024.

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