In May 2023, State Farm announced that it was no longer going to write new home insurance policies in California because of increasing wildfire risk and construction costs. This is an enormous decision, as State Farm is one of the state's largest insurers and is the country's largest insurer by volume. The insurer will stop accepting new applications for homeowners and business policies, but will not make any changes to business already on the books. State Farm is not the only insurer taking such steps, as the growing risk of wildfires and increasing state regulations have made it difficult for insurers to properly rate the exposures.

With the increase in wildfires over the past several years, the move should not be a surprise. At one time there was a wildfire season running from May to December, with peak season in California being July to December. With drought conditions since 2000 creating a megadrought that's the driest 22 years in the past 1200 years, an increase in the number of wildfires should be expected.

Likewise, people have been moving closer to wildfire areas. The wildland urban interface (WUI) is the transition area between developed areas and undeveloped land. People move into this area because it's pretty and they want to be close to nature. Herein lies the rub; being that close to wildland areas increases one's risk of wildfire. According to FEMA, between 2002 and 2016 an average of over 3,000 structures per year were lost to WUI fires in the United States. That's 42,000 structures during that time period. Also, the WUI continues to grow by 2 million acres a year. A map of areas with the largest number of homes in the WUI relative to the total houses in the state can be found here.