State Farm, the largest homeowners’ insurance company in California, has requested a 22% average rate increase, citing rising fire risks. The company, which insures over 1 million Californians, expects to pay out significantly more due to recent devastating blazes in the Los Angeles region.
The request comes as residents struggle to secure affordable homeowners’ insurance amidst a fragile market. State Farm has received over 8,700 claims from the Los Angeles fires and paid out $1 billion to customers so far. The insurer attributes the increased costs to higher risk levels in California due to increasing fire frequency and destruction.
Insurance Commissioner Gabriel Sanchez has expressed concerns about State Farm’s financial condition, stating that the department will respond with urgency and transparency. Critics, such as Consumer Watchdog executive director Carmen Balber, argue that the company is taking advantage of the situation to squeeze Californians.
The rate increase request marks a significant move by State Farm, which has been trying to reduce its exposure in California due to increasing disaster costs. The company’s decision has raised questions about its financial management and whether it is exploiting the market for profit.
Source: https://www.nytimes.com/2025/02/03/us/state-farm-california-rate-increase.html