California Insurance Commissioner Ricardo Lara has provisionally approved a request by State Farm for a 22% emergency interim rate increase in homeowners insurance following the vast devastation created by the Los Angeles County wildfires.
In a statement, Lara stressed the request will be formally approved “only if the company can justify it with data in a public hearing scheduled for April 8, 2025.” Lara also requested that State Farm halt policy non-renewals for California homeowners and “pursue a $500 million capital infusion from its parent company to restore financial stability.”
State Farm is California’s largest home insurer, with more than 1 million customers. Last month, the company informed Lara’s office that it would be able to cover claims from the wildfires, but added the disaster frayed its financial condition to the point that the 22% rate increase was required to stave off insolvency.
“The role of Insurance Commissioner involves balancing a stable and sustainable insurance market that serves consumers with effective oversight,” said Lara. “To ensure long-term choices for Californians, I had to make an unprecedented decision in the short term. 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. The facts will be revealed in an open, transparent hearing.”
Lara added, “We will finally get to the bottom of State Farm’s financial condition. I am confident that my approach will provide Californians with greater choices in a competitive and stable insurance market – exactly what they deserve.”
