Thousands of California homeowners will be out of luck as American National Group stops offering the state coverage.

American National Group, which was purchased by Brookfield Asset Management Reinsurance Partners for $5.1 billion around two years ago, is yet another insurance agency to leave the state as home repair prices surge amid wildfires and heightened HOA costs.

The insurance agency is leaving eight other states as well due to revenue losses, and all policies will officially end by this fall. Policyholders should expect their non-renewal notices as early as August.

Roughly 36,475 homeowner policies were covered in California by American National as of December, but soon these homeowners will have to find a new insurance company.

“This action is driven by significant and persistent profitability issues in the homeowner’s insurance market,” an American National spokesperson told Insurance Business Magazine.

The company also said “inflationary pressures driving up costs, increasing claims frequency, and competitive market conditions” contributed to the policy removal in California as well as eight other states.

Those states included Arkansas, Colorado, Louisiana, Minnesota, Oklahoma, South Carolina, South Dakota, and Washington.

Newsweek reached out to American National via email for further comment.

“Impacted clients will receive a pre-non-renewal letter with more information followed by a formal non-renewal notice following all regulatory requirements,” Scott Campbell, chief client experience and corporate comms officer at American National told KCRA3.

State Farm, Allstate and Farmers Insurance have also paused new homeowner policies or updated their rules in California. Previously, the three companies covered 40 percent of all California home insurance.

The insurance companies are fleeing California as the state has already experienced 137 wildfires in 2024 so far, destroying homes and acres of land in the process.

“The season’s outlook calls for vigilant monitoring and preparedness, as these varied weather patterns may lead to differing fire risks across regions,” the California Department of Forestry and Fire Protection said on its website.

While American National is leaving several other states besides California, the specific circumstances in that state are increasingly making homeowners weary, especially as their options for home insurance dwindle and costs increase.

“Insurance costs should raise an alarm for homebuyers,” Joe Cronin, president of International Citizens Insurance, told Newsweek. “The insurance market in California is notoriously complex due to the high risk of blazes and a state statute that demands additional processes for rate increases exceeding 7 percent, such as board consent and examination by the insurance deputy commissioner.”

Insurance companies are increasingly pulling out of California due to their bottom line, profits, said William Lemmon, the managing property/casualty broker and standing agency principal of Los Angeles-based Broadway Insurance Services.

“It all comes down to an attempt to maintain their profitability,” Lemmon told Newsweek. “In combination with recent severe storms and wildfires, an increased cost of labor and materials due to inflation, and rates based on 2020-2021, carriers simply can’t sustain to offer terms in the state as they once could.”

For prospective homebuyers, the insurance hit could likely delay or prevent homeownership entirely, said Alan Chang, the founder and president of Vested Title & Escrow.

“Prospective buyers trying to enter the market now are already facing higher home values on top of higher interest rates,” Chang told Newsweek. “This is a perfect storm against home affordability.”