California Insurance Commissioner Ricardo Lara has approved an emergency rate hike request by State Farm, allowing the insurance provider to increase premiums for homeowners, renters, and landlords. The decision comes after the company faced significant financial losses due to the Palisades and Eaton fires that occurred during a January windstorm. These fires were among the costliest natural disasters in U.S. history, causing billions of dollars in property damage and making international headlines.
The approved rate increase includes a 17% hike for homeowners’ policies, which is 5% lower than the 22% initially requested by State Farm. Additionally, the decision allows for rate hikes of 15% for condo and renters insurance and 38% for landlord rental-dwelling insurance. The emergency rate increase is set to take effect on June 1, with a full rate hearing scheduled for a later date.
As part of the approval agreement, State Farm is required to receive an immediate $400 million cash infusion from its parent company to address its serious financial condition. The company is also prohibited from issuing any new block non-renewals through the end of 2025. Commissioner Lara emphasized that the decision is part of addressing a statewide insurance crisis affecting millions of Californians.
“We are in a statewide insurance crisis affecting millions of Californians,” Lara stated. “Taking this on requires tough decisions. This is not a game. This is not a media-driven moment for some to exploit — this impacts people I am committed to protecting.”
