State Farm — The Good Neighbor’s not so Neighborly California Rate Hike Request

State Farm announced it would quit writing new homeowners policies in California a year ago. A few months back the like a good neighbor company said it is going to non-renew another 72,000 homeowners and commercial policies.

Since then, officials at the California Department of Insurance and its commissioner, Ricardo Lara have been desperately trying to get State Farm, and other companies that have left the state, back into the fold.

Last week State Farm said what it needs to return. And that need is staggering, and likely, unacceptable.

  • A 30% rate hike for homeowners policies
  • A 36% increase for condo owners
  • A 52% rate hike for renters policies

California Insurance Commissioner Ricardo Lara said the rate request is a good indication of just how solid the company is at the present time.

“State Farm General’s latest rate filings raise serious questions about its financial condition.” Lara said. “This has the potential to affect millions of California consumers and the integrity of our residential property insurance market.”

So before deciding anything, Lara and the California Department of Insurance will want to — as Lara put it — “get to the bottom” of State Farm’s financial position.

In a statement that went along with the rate hike request, State Farm explained its troubled financial position

“Rate changes are driven by increased costs and risks and are necessary for State Farm General to deliver on the promises the company makes every day to its customers,” the company said. “We continue to look for ways to maintain competitive rates.”

Source link: Insurance Business America — https://bit.ly/4cmNofi

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