LOS ANGELES, May 13, 2025 – An Administrative Law Judge has recommended approving State Farm General’s request for an interim rate increase, which could lead to significant premium hikes for various policyholders if Insurance Commissioner Ricardo Lara approves it.
The proposed rate changes include a 17% increase for homeowners, 15% for renters and condo owners, and a substantial 38% hike for rental dwelling policies, potentially taking effect as early as June 1. Consumer Watchdog, a prominent advocacy group, has strongly criticized the proposed decision, arguing that it contradicts the principles of voter-approved Proposition 103 by allowing the rate increase before State Farm justifies it.
“Today’s decision that would make consumers pay now but allow State Farm to wait months before having to show its math is a great disappointment for consumers,” said Carmen Balber, executive director of Consumer Watchdog. The organization is particularly concerned about State Farm policyholders who are still recovering from recent Los Angeles fires and are experiencing difficulties with their claims.
Recent allegations have surfaced regarding State Farm’s handling of fire claims following the Eaton and Palisades fires in Los Angeles. Policyholders have reported numerous issues, including delays, denials, rotating adjusters, and inadequate damage assessments, leading to financial hardship and widespread criticism.
“It adds insult to injury for consumers to be forced to pay significantly more for coverage when some of these same consumers may be simultaneously trying to recover from the fires while State Farm is mishandling their existing claims,” Balber added.
While the proposed decision includes a provision for a full rate hearing in October where State Farm will be required to justify the rate increase, Consumer Watchdog remains skeptical. The agreement also promises refunds if the final rate is determined to be excessive.
“Refunds will be too little too late for homeowners who are already struggling to pay their home insurance premiums,” Balber noted. “Nevertheless, we will fully defend consumers’ right to fair rates in the upcoming hearings where State Farm will finally have to justify what they want to charge.”
Related Information
The proposed rate hike and subsequent hearing are significant developments in the ongoing discussion about insurance rates and consumer protection in California.
