Farmers Insurance has limited new homeowners insurance policies in California, joining other major national insurance providers.

Farmers, the second-largest provider of homeowners insurance in the state, said it placed the cap on the number of policies in California effective July 3. The company cited high costs and wildfire risks.

"With record-breaking inflation, severe weather events, and reconstruction costs continuing to climb, we are focused on serving our customers while effectively managing our business," Farmers Insurance said in a statement, adding it will limit the new policies "to a level consistent with the volume we projected to write each month before recent market changes."

It's getting harder and harder to find homeowners insurance in the states that are the most vulnerable to the effects of climate change.

Farmers' shift follows decisions by State Farm and Allstate, two of America's largest insurers. The companies said they will no longer write new homeowners policies in the state. Both cited wildfire risk as a reason for the move and blamed limits placed on insurance premiums in states like California. Insurance companies also say rising costs for labor and building costs make replacing homes costly.

"The cost to insure new home customers in California is far higher than the price they would pay for policies due to wildfires, higher costs for repairing homes, and higher reinsurance premiums," said a statement from Allstate explaining its decision to stop writing new policies last fall.

Rising temperatures could increase the risk of extreme wildfires worldwide in the coming years, according to an analysis by the UN Environment Programme.