State Farm Wants an Emergency Rate Increase — California’s Lara Wants to Know Why

State Farm wants an “emergency rate increase.” Wildfire losses — especially in the Los Angeles area — are the reason behind the request. The company is asking for the rate hike to go into effect on May 1st.

The increase starts with a 22% increase for non-tenant homeowners. State Farm is also seeking a 15% hike for renters, 15% for condo owners and 38% to insure a rental property.

“Under the strict review laid out by Proposition 103, the burden is on State Farm to show why this is needed now,” Lara said. “State Farm has not met its burden.”

Lara wants State Farm officials and officials from his department, and representatives from the consumer association, Consumer Watchdog to meet in Oakland on February 26th.

Between now and the February 26 meeting, Lara wants answers to these questions:

• State Farm’s financial stability: Why has the company’s financial position deteriorated despite previous rate increases, and what other steps—beyond raising rates—has the company taken to restore stability?
• Justification for the emergency rate increase: What has changed since State Farm’s last rate filings that now requires urgent relief?
• Consumer impact: How would granting this request affect policyholders, especially those who have already faced premium increases and non-renewals?
• Transparency in decision-making: Has State Farm provided adequate documentation to justify its claims, and is it considering financial support from its parent company?

“Our decisions must be guided by transparent data and an honest reckoning with the challenges we all face together. As the elected head of the Department, my primary responsibility is to the people of California,” Lara said. “This situation highlights the voters’ wisdom in having an independent, elected insurance commissioner making decisions to uphold market integrity in response to evolving threats, which today include climate change, rising global reinsurance costs, and a tightening national property insurance market.”

Source link: California Department of Insurance —https://bit.ly/41msjyw