California Approves State Farm’s Request for 17% Premium Increase for Homeowners
California’s top insurance regulator has approved State Farm’s request to raise premiums by 17% for its home insurance customers in the state. The decision, made on May 13, 2025, aims to help State Farm rebuild its capital following the devastating Los Angeles wildfires in January 2025.
The increase will apply to all of State Farm’s roughly 1 million homeowners insured in California. State Farm had initially requested a 22% rate increase but revised it to 17% during a recent hearing. The insurer also requested a 38% hike for rental owners and 15% for tenants. The new rates are set to take effect in June and will be temporary until the state considers State Farm’s request for a 30% rate increase, scheduled for hearings in October.
Insurance Commissioner Ricardo Lara stated that he expects State Farm to provide the highest level of service to its California customers and to justify its financial condition in a full rate hearing. State Farm received a financial rating downgrade last year and has seen a decline of $5 billion in its surplus account over the last decade. The company has paid over $3.51 billion and is handling more than 12,600 claims as of May 13, 2025.
Consumer Watchdog opposed State Farm’s request, expressing disappointment that consumers would have to pay the emergency rates immediately while State Farm could wait months to justify its financial condition. State Farm has agreed to refund the emergency rates if California later approves lower rates.
