California Department of Insurance & Consumer Watchdog Settle with State Farm

The California Department of Insurance, Consumer Watchdog, and State Farm reached a settlement that will allow State Farm’s emergency interim rate increase to go forward. Here’s how the agreement shakes out:

• For homeowners policies the interim rate of 17% is going to stay in place
• There will be no additional impact to policyholders past that increase
• For renter dwelling owners, the 38% rate request hike will drop to 32.8%
• Affected policyholders will get a refund and 10% interest on what they have paid
• Condo policy rates will drop from 15% to about 5.8%
• Policyholders will get a refund and 10% interest going back to June 1, 2025
• Renter insurance policyholders will see a slight jump from 15% to 15.65%

The settlement now has to be reviewed and approved by an impartial Administrative Law Judge.

State Farm also agrees to continue the moratorium on homeowners, rental dwelling, condominium and renters non-renewals and cancelations for at least another year. California Department of Insurance Deputy Commissioner Michael Stoller said the settlement will provide continued stability for policyholders as the department continues to work toward a more stable insurance market.

“This rate hearing process reflects the strength of California’s transparent and long-standing consumer protections,” Stoller said. “Our Department’s role is to carefully review the data and hold insurance companies accountable so Californians are not paying more than is justified.”

This is the process from here:

• On March 6th the parties filed the settlement agreement with the Administrative Law Judge
• On March 20th supporting declarations will be filed with the judge
• If no additional evidence is needed, on April 7th an independent decision will be issued by the judge
• Once the decision is issued, Insurance Commissioner Ricard Lara will review it and make a final decision

Source link: California Department of Insurance — https://bit.ly/3OTfGHH