Friday, June 21, 2002 | 11:18 a.m.
BLOOMINGTON, Ill. -- State Farm Insurance Co., the nation's largest insurer of homes, is cutting back or placing a moratorium on writing new homeowner policies in more than 20 states, including Nevada, because of recent losses.
The action is being taken to counter a net loss of $5 billion reported in 2001, when a series of natural disasters caused claims to increase dramatically, State Farm spokesman Phil Supple said Thursday.
Refusing to take on new business shelters the company from taking on additional liability, Supple said.
Customers who already have homeowner policies with State Farm will not be affected, the company said. Nevada is one of the states where State Farm is restricting, but not eliminating, the issuance of new policies.
Analyst Adam Klauber said rates for homeowner insurance are often underpriced and the dollar amount of claims is rising nationwide, so companies have cut back on new policies either through tougher underwriting standards or moratoriums.
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