MENLO PARK, CA – Roelof Botha, the influential Senior Steward of venture capital firm Sequoia Capital, announced on social media that Chubb, a major insurer, is unwilling to renew his home insurance policy in California. Botha attributed the non-renewal to market failures caused by "price ceilings" and the "CA government's complete mismanagement of its insurance industry." This personal experience underscores a wider crisis gripping California's homeowners' insurance market.
"I just received notice from @ChubbNA that they are unwilling to renew insurance for my home in California. Markets fail when price ceilings prevent markets from clearing. The CA government's complete mismanagement of its insurance industry is leading to this widespread failure for its citizens," Botha stated in his tweet.
Chubb's decision is part of a broader trend, with the insurer reportedly shifting high-value home policies from admitted lines to less regulated Excess & Surplus (E&S) lines starting mid-October 2025. This move allows insurers greater flexibility in pricing to reflect risk, unlike the admitted market where rates are subject to stringent state approval.
Several major insurers, including State Farm, Allstate, Farmers, USAA, Travelers, and Nationwide, have either ceased writing new policies or significantly limited their coverage in the state. Insurers cite escalating wildfire risks, surging construction costs, and a challenging reinsurance market as primary drivers for their pullback. They also point to state regulations that prohibit the use of forward-looking catastrophe models in rate setting and prevent the full incorporation of reinsurance costs, which they argue lead to rates that do not adequately cover their exposure.
The exodus of insurers has left many California homeowners struggling to find affordable coverage, increasingly relying on the California FAIR Plan, the state's insurer of last resort. The FAIR Plan has seen its policyholder count double in recent years, now insuring approximately half a million properties. This reliance often comes with higher premiums and more limited coverage.
California Insurance Commissioner Ricardo Lara has introduced reforms aimed at stabilizing the market, including requiring major insurers to increase coverage in wildfire-distressed areas and accelerating the rate review process. However, critics like Botha contend that these measures do not fully address the underlying issues of regulatory constraints on pricing, which they argue prevent a healthy, competitive market from functioning effectively.