Ten Activities That State Farm Says Are Too Risky to Insure
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources.
Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content.
Following State Farm's recent rate hike requests in California, policyholders in the state can expect higher premiums when their policies are renewed in 2025 and 2026—that is, if they are lucky enough not to be dropped by the carrier under its new underwriting guidelines.
According to documents filed earlier this year, first reported on by the San Francisco Chronicle, State Farm requested a 39 percent rate increase for its Personal Liability Umbrella Program in the state, which provides policyholders with extra protection beyond a basic personal liability policy.
It also created a new list of activities and conditions which are considered "unacceptable" for the carrier to insure, as the risk would be too high to take on.
Newsweek reached out to State Farm for comment via email on Tuesday.
Why It Matters
State Farm has been among several major insurers in California that have cut coverage across the state in recent years, citing rising costs and growing catastrophe exposure. When they have not stopped renewing policies or accepting new ones, they have instead asked for dramatic rate increases, challenging strict state regulations that have kept premiums artificially low for years.
The company is currently seeking rate hikes for its homeowners' policies as well as for its umbrella liability policies, citing that more frequent accidents in recent years have been spiking medical bills and increasing costs for the company.
California regulators face a difficult dilemma: either they approve of drastic rate hikes such as the ones requested by State Farm, or they risk facing shrinking availability for their residents, an issue that has already laid bare the fragility of the Golden State's home insurance market.
What To Know
State Farm's Personal Liability Umbrella Program offers a minimum of $1 million to policyholders for costs arising from a wide range of situations—from medical bills triggered by an injury in the home or a car accident, to attorney's fees for defamation lawsuits or cases of libel and slander.
According to the document filed by State Farm in January, existing customers can renew their maximum limit of liability for no more than $10 million, with the exception of those who already have limits above $10 million, who can maintain them.
The carrier, which is the biggest home insurer in California, blocked applications to the program in late May 2023 with "no exceptions," so the new guidelines about who can be insured by the carrier and who cannot apply to renewals only.
While some descriptions of "unacceptable" behaviors detailed in the filing are expected, for example, a person who has had a major conviction for driving under the influence of alcohol or drugs won't be eligible for the program, others are more outlandish.
Here are some of the most unusual behaviors and conditions that are too risky to be insured under State Farm's California Personal Liability Umbrella Program:
Providing child care services where more than six children are cared for
Being a person with high visibility, including professional entertainers, athletes, coaches, political office holders, broadcasters, authors, or columnists who have received unfavorable publicity via any communication avenue
Owning property outside of the continental U.S., including in Hawaii and Alaska
Having hog breeding operations on a farm
Having a commercial dog kennel operation on a farm
Having children's activities in a farm, such as corn mazes, haunted barns, hayrides, and similar activities, for a fee
Spraying or dusting crops with aerial products as a policyholder
Allowing public access for Pick-Your-Own operations on farmland
Co-owning a farm with people who are not their relatives
Offering guided hunting, lodging for hunters, or exotic animal hunting with dedicated employees on a farm
People navigate one of the world's largest corn mazes at Cool Patch Pumpkins in Dixon, California, on October 17, 2024.
People navigate one of the world's largest corn mazes at Cool Patch Pumpkins in Dixon, California, on October 17, 2024.
JOSH EDELSON/AFP via Getty Images
Janet Ruiz, a spokesperson for the Insurance Information Institute (or Triple-I) told the San Francisco Chronicle that it is normal for carriers to write highly specific underwriting guidelines and add new "unacceptable" conditions over time.
What People Are Saying
State Farm justified its request to increase rates for the Personal Liability Umbrella Program, citing that "personal liability costs have risen dramatically across the industry due to more accidents, escalating medical bills and larger legal settlements."
What Happens Next
Californians who are already covered by State Farm's Personal Liability Umbrella Program could be disqualified under the new underwriting guidelines when their policies are renewed.
They are also likely to face higher premiums. If approved, State Farm's requested 39 percent hike on its Personal Liability Umbrella Program policies would be effective as of August 1, 2025. The increase would come on top of a 29 percent hike that has been in force since March.
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