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2mo ago

California Insurance Commissioner Weighs State Farm's Emergency Rate Hike Request

State Farm seeks approval for significant rate increases to address wildfire losses as regulators demand guarantees on future coverage in California.

The Ralphs market destroyed in the Palisades Fire on Thursday, January 9, 2025. Many workers at businesses, stores, restaurants and daycare centers are out of work. (Photo by David Crane, Los Angeles Daily News/SCNG)
A State Farm ad is seen on the basket during a PAC12 womens basketball game between the Stanford Cardinal and the Washington Huskies on January 31, 2021 at Hec Edmundson Pavilion in Seattle, WA.
California Insurance Commissioner Ricardo Lara, seen here at a press conference following Wednesday's meeting with State Farm executives, hopes to announce in two weeks whether to grant the company's rate hike request.
Californi Insurance Commissioner Richardo Lara, left, met with Dan Krause, right, the CEO of State Farm General, on Wednesday. A transcript of the meeting was released Thursday evening.

Overview

  • State Farm has requested a 22% rate hike for homeowners and varying increases for other property types, citing $7.6 billion in wildfire-related losses.
  • California Insurance Commissioner Ricardo Lara is expected to decide within two weeks but has expressed concerns about setting a precedent for bypassing formal rate hearings.
  • State Farm executives stated the company would not resume issuing new policies in California even if the rate increases are approved.
  • Consumer advocacy group Consumer Watchdog has challenged the request, arguing that State Farm has not provided sufficient financial data to justify the hikes.
  • Lara is pressing State Farm for guarantees that it will expand coverage in California if the rate hikes are approved, but the company has yet to commit to such assurances.