Rising toxic mold claims have left their mark on yet another state as State Farm -- the largest insurer in California -- has decided it would no longer write new policies in the state starting May 1. With 1.5 million home policyholders in California, State Farm represents 22 percent of the state's market.

Insurers in California have been battling recently passed state legislation that would require insurers to keep a standard level of mold coverage and forbid restrictions. While most insurers in the state cover mold damage if it is a result of sudden or accidental water damage, many refuse to cover mold claims if it is a matter of faulty maintenance by the homeowner.

Allstate, the third-largest insurer in the state, capped the amount for mold cleanup at $5,000, even if it's part of a water-damage claim.

Though partly due to past losses, mold is the main reason State Farm is halting new polices temporarily but indefinitely. According to the Associated Press, a spokesman for State Farm said it is not a reaction to the proposed legislation, but aims to avoid further losses until it rebuilds a financial cushion.

Compared to asbestos in terms of abatement and remediation, mold could eventually cost billions of dollars in both claims and lawsuits. Homeowners insurance already is poised to go up as much as 25 percent. Rates have nearly doubled for many homeowners in Texas.

In California, where the rise in claims comes second only to Texas, homeowners blame new building materials and air-tight, energy-efficient construction for the mold frenzy.