Please ensure Javascript is enabled for purposes of website accessibility

Why COVID Is Spreading Again This Summer

19 hours ago

Amid Threats From Trump, Sen. Adam Schiff Forms Legal Defense Fund

23 hours ago

Israel to Place $500 Million, US-Funded Order for Boeing Aerial Refueling Tankers

23 hours ago

Hurricane Erin Threatens North Carolina’s Outer Banks With Storm Surge

23 hours ago

Israel Approves Settlement Plan to ‘Erase’ Idea of Palestinian State

24 hours ago

Tech Stocks Pressure Wall Street as Caution Sets in Ahead of Fed Meet

24 hours ago

Most Americans Believe Countries Should Recognize Palestinian State, Reuters/Ipsos Poll Finds

24 hours ago

Gabbard Revokes Security Clearances of 37 Current, Former US Intelligence Members

2 days ago

Trump Escalates Attacks Against the Smithsonian Institution

2 days ago

California Republicans File Suit Seeking to Block Newsom Redistricting Plan

2 days ago
CA Regulator Mulls State Farm's Request for 22% Home Insurance Hike
gvw_ap_news
By Associated Press
Published 5 months ago on
March 14, 2025

An aerial view shows the devastation left by the Palisades Fire in the Pacific Palisades section of Los Angeles, Monday, Jan. 27, 2025. (AP/Jae C. Hong)

Share

Getting your Trinity Audio player ready...

SACRAMENTO — California’s top insurance regulator on Friday said he would approve an emergency request by State Farm to raise premiums 22% on home insurance for about a million customers if the insurance giant could justify the hike at a public hearing.

State Farm, the state’s largest insurer with roughly 1 million home insurance policies in California, said the emergency rate would help the company rebuild its capital following the Los Angeles wildfires that destroyed more than 16,000 buildings, mostly homes. The company is trying to prevent a “dire” financial situation that executives say could force them to drop more California policies.

California Insurance Commissioner Ricardo Lara said other California insurers won’t be able to absorb State Farm’s customers if the insurance giant stops doing business in California, but that he wanted more data on how the company manages its finances and calculates risks. He asked the company to present its argument publicly on April 8 to a judge, who will then give a proposed decision. Lara will then make a final decision.

“State Farm claims it is committed to its California customers and aims to restore financial stability. I expect both State Farm and its parent company to meet their responsibilities and not shift the burden entirely onto their customers,” Lara said in a statement. “The facts will be revealed in an open, transparent hearing.”

The decision comes as California is undergoing a yearslong effort to entice insurers to continue doing business in the state as wildfires increasingly destroy entire neighborhoods. In 2023, several major companies, including State Farm, stopped issuing residential policies due to high fire risk. Lara last year unveiled a slate of regulations all aiming at giving insurers more latitude to raise premiums in exchange for more policies in high-risk areas. Those rules kick in this year.

California approved double-digit rate increases for nine out of ten largest insurers in California over the last few years, according to Consumer Watchdog, an advocacy group that opposes State Farm’s request for higher premiums.

State Farm executives told state officials the company was already struggling before the LA fires. The company received a financial rating downgrade last year and has seen a decline of $5 billion in its surplus account over the last decade. Last year, the company asked the state for a 30% rate increase, which state officials are still considering.

State Farm Estimates Its LA Fire Losses Could Exceed $7 Billion

The LA fires, which are now estimated to be the costliest natural disasters in the U.S. history, have made things worse, State Farm executives said. The company last month paid out roughly $1.75 billion to 9,500 claims and estimated the total loss to reach more than $7 billion. Its surplus also dropped from $1.04 billion at the end of 2024 to $400 million after the fires, according to State Farm. The company is using its surplus and reinsurance to settle the claims.

Without the ability to quickly rebuild its capital, banks and lenders could stop allowing State Farm insurance as collateral for mortgages and require State Farm policyholders to find coverage from different insurers, the company has argued. If homeowners can’t find a replacement, they’ll be forced on the FAIR Plan, which is designed as a temporary option to provide minimum coverage for those without private insurance.

More Californians are relying on the FAIR Plan than ever despite state regulator’s efforts to reduce the plan’s enrollment. The plan also needed a $1 billion bailout last month to pay out fire claims.

State Farm, in a statement, called Lara’s decision a “step in the right direction.”

“It’s time for certainty in the California insurance market for our customers,” the company said.

RELATED TOPICS:

DON'T MISS

What Are Fresno Real Estate Experts Predicting for 2025 and Beyond?

DON'T MISS

First California EV Mandates Hit Automakers This Year. Most Are Not Even Close

DON'T MISS

Wall Street Stocks Fall, Traders Focus on Fed

DON'T MISS

Top Dem on Oversight Committee Demands Trump Administration Account for Wildland Firefighter Vacancies

DON'T MISS

California’s Finances Face a Perfect Storm. It Could Eventually Lead to Another Tax Hike

DON'T MISS

International Rapper Derrick ‘Aesop’ McElroy Who Called Fresno Home Dies at 51

DON'T MISS

Trump Administration to Vet Immigration Applications for ‘Anti-Americanism’

DON'T MISS

Texas Republicans Approve Trump-Backed Congressional Map to Protect Party’s Majority

DON'T MISS

Fresno County Authorities Seek Suspect in Casino Assault

DON'T MISS

Poll: California Dems Favor Newsom Over Harris in 2028 Matchup

DON'T MISS

‘Moral Conflict’ Drives Dem Doubts About Newsom’s Redistricting Plan

DON'T MISS

Fresno Animal Center at Critical Capacity After Receiving Over 100 Dogs

UP NEXT

Top Dem on Oversight Committee Demands Trump Administration Account for Wildland Firefighter Vacancies

UP NEXT

California’s Finances Face a Perfect Storm. It Could Eventually Lead to Another Tax Hike

UP NEXT

International Rapper Derrick ‘Aesop’ McElroy Who Called Fresno Home Dies at 51

UP NEXT

Trump Administration to Vet Immigration Applications for ‘Anti-Americanism’

UP NEXT

Texas Republicans Approve Trump-Backed Congressional Map to Protect Party’s Majority

UP NEXT

Fresno County Authorities Seek Suspect in Casino Assault

UP NEXT

Poll: California Dems Favor Newsom Over Harris in 2028 Matchup

UP NEXT

‘Moral Conflict’ Drives Dem Doubts About Newsom’s Redistricting Plan

UP NEXT

Fresno Animal Center at Critical Capacity After Receiving Over 100 Dogs

UP NEXT

Fresno Police Arrest Two SoCal Men in Homicide Investigation

International Rapper Derrick ‘Aesop’ McElroy Who Called Fresno Home Dies at 51

15 hours ago

Trump Administration to Vet Immigration Applications for ‘Anti-Americanism’

15 hours ago

Texas Republicans Approve Trump-Backed Congressional Map to Protect Party’s Majority

16 hours ago

Fresno County Authorities Seek Suspect in Casino Assault

16 hours ago

Poll: California Dems Favor Newsom Over Harris in 2028 Matchup

16 hours ago

‘Moral Conflict’ Drives Dem Doubts About Newsom’s Redistricting Plan

16 hours ago

Fresno Animal Center at Critical Capacity After Receiving Over 100 Dogs

17 hours ago

Fresno Police Arrest Two SoCal Men in Homicide Investigation

17 hours ago

Fresno Police Investigating Fatal Stabbing of 31-Year-Old Man

18 hours ago

Tulare County Sheriff Adds Goshen Teen to Most Wanted List

19 hours ago

Wall Street Stocks Fall, Traders Focus on Fed

PARIS — European stock markets fell on Thursday and Wall Street opened lower, as traders avoided making big moves and waited for the Federal...

2 minutes ago

U.S. one hundred dollar notes are seen in this picture illustration taken in Seoul February 7, 2011. (Reuters File)
2 minutes ago

Wall Street Stocks Fall, Traders Focus on Fed

Ventura County Firefighter Battles the Park Fire
4 minutes ago

Top Dem on Oversight Committee Demands Trump Administration Account for Wildland Firefighter Vacancies

California State Capitol
5 minutes ago

California’s Finances Face a Perfect Storm. It Could Eventually Lead to Another Tax Hike

Derrick 'Aesop' McElroy
15 hours ago

International Rapper Derrick ‘Aesop’ McElroy Who Called Fresno Home Dies at 51

A U.S. Citizenship and Immigration Services (USCIS) naturalization ceremony in New York City, U.S., September 17, 2021. (Reuters File)
15 hours ago

Trump Administration to Vet Immigration Applications for ‘Anti-Americanism’

State Representative Matt Morgan (R-TX) holds a map of the new proposed congressional districts in Texas, during a legislative session as Democratic lawmakers, who left the state to deny Republicans the opportunity to redraw the state's 38 congressional districts, begin returning to the Texas State Capitol in Austin, Texas, U.S. August 20, 2025. (Reuters/Sergio Flores)
16 hours ago

Texas Republicans Approve Trump-Backed Congressional Map to Protect Party’s Majority

Fresno County authorities are searching for Robert Rios, 27, of Auberry, wanted for assault, burglary and drug possession following a June 6 domestic disturbance at Mono Wind Casino. (Fresno County SO)
16 hours ago

Fresno County Authorities Seek Suspect in Casino Assault

16 hours ago

Poll: California Dems Favor Newsom Over Harris in 2028 Matchup

Search

Help continue the work that gets you the news that matters most.

Send this to a friend