State Farm canceled hundreds of homeowners’ policies last summer in the Pacific Palisades area, now affected by severe wildfires. Many insurers defended the move due to rising wildfire risks and regulations limiting premium increases.

The insurance company canceled thousands of California homeowners' insurance policies last year in an attempt to avoid "financial failure."

State authorities previously listed the Palisades as one of the five Southern California areas with the highest concentration of potential wildfire risks. The community also is among the areas most impacted by an unavailability of insurance coverage.

State Farm is being accused of canceling thousands of fire insurance policies in California right before the massive wildfires. More than 10,000 homes and businesses have been destroyed as multiple wildfires continue to ravage parts of Los Angeles County,

The outbreak of deadly wildfires in Southern California has prompted criticism of insurers who have dropped coverage in the state due to regulations that make it hard to price for risk.

State Farm cited “catastrophe exposure” as one reason it wasn’t renewing policies for many Californians, including those in Los Angeles’ Pacific Palisades.