State Farm has paid more than $1 billion to policyholders from over 8,700 claims related to recent wildfires as of Saturday. However, company leaders have warned that the final payout will be much higher. In a letter to California’s insurance commissioner, they stated, “We know we will ultimately pay out significantly more.”
State Farm officials explained that losses from previous natural disasters had already strained the company’s finances, leading to a downgrade in its credit rating. They cautioned that without additional capital, the rating could be reduced again, potentially affecting the more than 2.8 million policies held by Californians.
