California Insurance Regulator Grants Conditional Approval for State Farm Rate Hike
State Farm must justify the 22% premium increase at an April hearing and agree to pause policy cancellations to stabilize its finances.
- California Insurance Commissioner Ricardo Lara conditionally approved a 22% average home insurance rate hike for State Farm, subject to a public hearing on April 8.
- State Farm must pause non-renewals of homeowner policies through 2025 and seek a $500 million capital infusion from its parent company to address financial instability.
- The rate hike follows $7 billion in claims from recent Los Angeles wildfires, which significantly depleted the insurer’s financial surplus.
- If approved, the new rates would take effect on June 1, impacting homeowners, renters, condo owners, and rental property policies with increases ranging from 15% to 38%.
- Consumer Watchdog, a consumer advocacy group, opposes the hike, arguing State Farm's financial issues stem from internal mismanagement and reinsurance practices.