State Farm Insurance Company announced it would stop writing new homeowners insurance in 17 states in efforts to boost profitability, according to reports by the Dow Jones Newswire and the Associated Press.
The move comes after The Bloomington, Ill.-based insurer reported a $5 billion net loss in 2001 as the company was faced with rapidly increasing claims costs due to a series of natural disasters.
The company placed a moratorium on new homeowners policies in Alaska, Arkansas, California, Hawaii, Idaho, Kansas, Louisiana, Maryland, Missouri, Montana, North Carolina, Oklahoma, Oregon, Texas, Virginia, Washington and West Virginia.
State Farm has also restricted sales of new homeowners policies in Arizona, New Mexico, Colorado, Utah, Nevada and Wyoming.
According to a State Farm spokesperson, the moratoriums have been enacted on a state-by- state basis, depending on profitability concerns. The restrictions are said to be temporary.
The spokesperson also commented that decisions to offer or not offer policies are made on a regional basis.
Existing homeowners policies will not be affected by the new restrictions.
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