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2w ago

State Farm's Emergency Rate Hike Proposal Under Review in Unprecedented California Hearing

The hearing, initiated by Insurance Commissioner Ricardo Lara, will determine whether State Farm can implement substantial rate increases for nearly 3 million policyholders starting June 1.

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Altadena Heritage Chair Hans Allhoff visits what was his mid-century home in Rubio Canyon in Altadena on Friday, Feb. 21, 2025. Allhoff and Altadena Heritage are advocating for more thought to go into community planning around the rebuild of their town centers destroyed in the Eaton fire. (Photo by Sarah Reingewirtz, Los Angeles Daily News/SCNG)
California Insurance Commissioner Ricardo Lara, seen here in Oakland in February, has granted State Farm preliminary approval to raise rates by 22% for homeowners. But the approval is conditional on the company justifying the price hike to an administrative law judge. 
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Overview

  • State Farm is seeking emergency interim rate increases of 22% for homeowners, 15% for renters and condos, and 38% for rental properties, citing over $7 billion in projected wildfire claims.
  • California Insurance Commissioner Ricardo Lara called the emergency hearing, marking the first time such a rate request has been reviewed in this expedited manner.
  • The hearing, held in Oakland and livestreamed for public viewing, is expected to last up to three days and will include testimony on State Farm’s financial condition and wildfire-related losses.
  • Consumer advocacy group Consumer Watchdog has challenged the proposal, arguing that State Farm lacks sufficient justification and should seek financial support from its national parent company instead of raising rates.
  • If approved by the administrative law judge, the rate increases will take effect on June 1, impacting nearly 3 million State Farm customers across California.