Is Your Home Insurance Company Leaving Your State?

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.

On This Page

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  Which States Are Insurance Companies Dropping Out Of?

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  Why Are Home Insurance Companies Leaving States?

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

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  How To Get Coverage if Your Insurance Carrier Drops You

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  FAQs

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 Insurers like Lemonade, Farmers Direct, AmGUARD and Falls Lake Insurance have withdrawn from California completely, while others like State Farm, Liberty Mutual, Allstate, AIG and Chubb have stopped selling certain types of policies in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.

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.