HOME STATE HOLDINGS, INC.


                                [GRAPHIC OMITTED]

                                  Press Release

For More Information, Contact:                             For Immediate Release
Investor Relations - (908) 935-2736                                 June 5, 1997


Shrewsbury, NJ - June 5, 1997 - Home State Holdings, Inc. (the "Company")
(NASDAQ-HOMS) announced today that it is no longer engaged in discussions with
any potential investors to provide funding of its insurance company subsidiaries
as a group, namely, Home State Insurance Company, Quaker City Insurance Company,
Pinnacle Insurance Company, Westbrook Insurance Company and New York Merchant
Bakers Insurance Company (the "Subsidiaries") and that the Company has notified
all jurisdictions that, subject to any applicable regulatory requirements its
Subsidiaries will cease writing new business. The Company also announced that
the New York Insurance Department has directed both Home Mutual Insurance
Company of Binghamton, New York, a managed mutual, and New York Merchant Bakers
Insurance Company to cease accepting renewals of existing policies with the
exception of personal auto business at New York Merchant Bakers. Management is
continuing to explore possible interest of third parties in the acquisition of
any of its Subsidiaries on a stand-alone basis. Any Subsidiaries which are not
sold will continue in run-off status to wind up their affairs. The Subsidiaries
domiciled in the states of Connecticut, Georgia, New Jersey and Pennsylvania are
under administrative supervision in those states. Additionally, one or more of
the insurance regulatory bodies in which the Subsidiaries are domiciled may
require the Subsidiary over which it has jurisdiction to enter into a Consent
Order to Rehabilitation which would provide for the appointment of a receiver to
manage the operations of such. The Company also announced that the services of
Donaldson, Lufkin & Jenrette, which had been assisting the Company in its
efforts to obtain additional capital, have been discontinued. The Company is in
violation under certain covenants in agreements with its banks and its
subordinated note holders and it is unlikely that the proceeds from a sale of
its Subsidiaries and other assets will be sufficient to discharge those
obligations.

                              CAUTIONARY STATEMENT

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking statements. This press release or any other written or oral
statements made by or on behalf of the Company may include forward-looking
statements which reflect the Company's current views with respect to future
events and financial performance. These forward-looking statements are subject
to certain uncertainties and other factors that could cause actual results to
differ materially from such statements. These uncertainties and other factors
(which are described in more detail elsewhere in documents filed by the Company
with the Securities and Exchange Commission, including the Company's Annual
Report on Form 10-K for the year ended December 31, 1996) include, but are not
limited to, uncertainties relating to general economic conditions and cyclical
industry conditions, uncertainties relating to government and regulatory
policies, volatile and unpredictable developments (include storms and
catastrophes), the legal environment, the uncertainties of the reserving process
and the competitive environment in which the Company operates. The words
"believe," "expect," "anticipate," "project," "plan," "expect" and similar
expressions identify forward-looking statements. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of
their dates. The Company undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future
events or otherwise.


Home State Holdings, Inc. is a property and casualty insurance holding company
primarily engaged in providing standard and preferred personal and commercial
auto insurance through its subsidiaries in New Jersey, New York, Pennsylvania,
Connecticut, Delaware, West Virginia, Georgia and Florida. Home State Holdings,
through several of its financial service subsidiaries, is engaged in certain
insurance related financial services activities.