In late May 2023, State Farm announced it would stop writing new property business in California. Allstate announced on Friday June 2, 2023 that it had stopped selling new property and casualty policies in California; the insurer had actually stopped issuing new policies months earlier. The reasons are the same: increased construction costs and worsening climate factors that make it harder to do business. Allstate stopped writing new homeowners, condominium, and commercial property policies in 2022 to continue protecting insureds who already had Allstate policies in force.

Allstate and State Farm are not the only insurers restricting policies in California. AIG and Chubb have also scaled back their coverage for multimillion-dollar homes, and Farmers has canceled or nonrenewed a number of condominium units in San Diego.

It has become a catch-22. Insurers need to be able to charge actuarially correct premiums in order to be able to remain solvent and pay claims, but increased premiums make it harder for insureds to purchase coverage. When insureds can't obtain coverage in the private market, then they go to the FAIR plan, which is the insurer of last resort. FAIR plan policies are often more restrictive than those available through the standard market.