State Farm: Some Californians can keep home insurance, but something major won't be covered

ORINDA, Calif. - Insurance giant State Farm says it will let certain California home insurance customers keep their coverage after all.

But there's a major catch: they won't cover any fire damage. 

The development was first reported by the San Francisco Chronicle. 

Back in March, State Farm announced they would not be renewing more than 30,000 policies. 

It is far from the only company to do that; nearly every major insurer is no longer issuing new policies in the state. 

Now State Farm is forcing customers to get fire coverage elsewhere. 

"Now what they’re going to be able to do is purchase the California FAIR plan," said Karl Susman, an insurance expert. "They can get this directly through the FAIR plan or theoretically if their agent is appointed through the fair plan, they can offer coverage."

Susman said the change is a small step in the right direction, especially given State Farm is the largest home insurer in the state.

"We’re talking about a sliver of policies," said Susman. "This doesn’t change the crisis in California. This doesn’t change what happens to anyone else that would be willing to purchase insurance and can’t find it."

Many agree. 

Annie Belinn has lived in her home in Orinda for more than two decades. Her coverage from farmers was dropped almost a year ago.

She gets her fire coverage from California's FAIR plan and supplemental insurance from another company.

Her yearly rate nearly quadrupled, while her coverage went down.

In a statement sent to KTVU, State Farm said:

"We recognize that the insurance market in California is challenging and securing property insurance has become more difficult. We are doing everything we can to support our customers during this time."

It said customers will be eligible by their next renewal or after July 3.