California insurance commissioner Ricardo Lara has rejected State Farm’s request for a 22% rate hike for homeowner policies, citing the company’s financial struggles amid claims from Southern California wildfires. The decision comes as State Farm processes nearly 8,700 claims and pays out over $1 billion to policyholders.
Lara called for a meeting with State Farm to address questions about the insurer’s financial condition and proposed rate hike. He emphasized the need for transparent data and honest reckoning in addressing climate-related risks.
State Farm had urged approval of the emergency rate hike, citing depleted capital and concerns over future claims. However, Lara stated that the company has not met its burden in justifying the increase.
The decision follows past decisions by State Farm to discontinue coverage for 72,000 homes in California and stop issuing new policies due to rising costs and regulatory issues.
Source: https://www.ktvu.com/news/california-rejects-state-farm-22-rate-hike