State Farm is proposing to raise its California homeowners insurance policies by 30 percent, according to documents submitted to the state.
In filings with the Department of Insurance in late June, State Farm said it is also seeking a 52 percent rate increase for renters and a 36 percent rate increase for condominium owners.
A State Farm spokesperson told The Epoch Times on July 3 that it is “working toward its long-term sustainability in California.”
“Rate changes are driven by increased costs and risk and are necessary for State Farm General to deliver on the promises the Company makes every day to its customers,” the spokesperson said.
“We continue to look for ways to maintain competitive rates and help our customers manage their risk. Rate filings are not final until approved by the California Department of Insurance,” the statement continued.
The company encouraged customers to talk with their insurance agent about potential discounts and general policy reviews.
In a statement, the California Department of Insurance commissioner suggested that the proposed hikes probably will not be approved.
“State Farm General’s latest rate filings raise serious questions about its financial condition,” Ricardo Lara, California’s insurance commissioner, told news outlets. “This has the potential to affect millions of California consumers and the integrity of our residential property insurance market.”
Mr. Lara said that the filings do not necessarily mean that people with homeowners insurance will see a change. He said the agency will use its “investigatory tools” to delve into State Farm’s financial situation before it makes a decision on the insurance firm’s proposal in California.
In December 2023, the state approved a State Farm proposal for a 20 percent hike for homeowners’ and condominium owners’ insurance policies.
“We are going to lead with facts to make sure Californians are protected,“ Mr. Lara added. ”The Department has made tough decisions in approving major State Farm rate increases to address their financial situation including 6.9 percent in January 2023 and 20 percent for homeowners and condominiums signed off by an intervenor group in December.”
The Epoch Times has contacted the California Department of Insurance for additional comment.
Meanwhile, State Farm said in May 2023 that it won’t be accepting new applications for business and personal lines of property and casualty insurance in California due to higher risks and higher costs of construction.
The insurer made reference to wildfires that erupt across the Golden State nearly every year, saying that it recognizes “the Governor’s administration, legislators, and the California Department of Insurance for their wildfire loss mitigation efforts.”
“However, it’s necessary to take these actions now to improve the company’s financial strength. We will continue to evaluate our approach based on changing market conditions,” the statement said.
In March of this year, the company confirmed that it had dropped 72,000 California home insurance and commercial policies, again saying that it’s trying to “ensure its long-term sustainability” in the state.
More than 3,000 acres in Northern California’s Butte County have been destroyed in a wildfire dubbed the Thompson Fire, officials confirmed on July 3.
The Thompson Fire broke out before noon on July 2, about 70 miles north of Sacramento, in and around the city of Oroville. It sent up a huge plume of smoke and grew to nearly 4.7 square miles by Wednesday morning. It was zero percent contained.
A state of emergency was declared Tuesday night by the city of about 20,000 people along the Feather River at the foot of the Sierra Nevada range. Evacuation centers were set up at a church and the county fairgrounds.
The Associated Press contributed to this report.
