State Farm seeks an emergency insurance rate increase after LA wildfires. It’s the latest blow to California’s housing market
CNN
State Farm General, California’s largest insurance provider, has requested an emergency interim rate hike averaging 22% for homeowners from state officials on Monday, citing a “dire” financial situation after destructive Los Angeles wildfires last month.
State Farm General, California’s largest insurance provider, has requested an emergency interim rate hike averaging 22% for homeowners from state officials on Monday, citing a “dire” financial situation after destructive Los Angeles wildfires last month. In a letter to California’s Commissioner of Insurance, Ricardo Lara, State Farm said it has already received more than 8,700 claims and paid over $1 billion to customers in the wake of the wildfires. “We know we will ultimately pay out significantly more, as these fires will collectively be the costliest in the history of the company,” the letter said. State Farm said the emergency interim rate hike was necessary to “help avert a dire situation for our customers and the insurance market in the state of California.” California homeowners already face some of the highest insurance premiums in the country, as insurers have deemed a large percentage of the state to be at high risk for wildfires. That’s squeezed homeowners and, in other cases, kept people out of the market entirely. In a statement, the California Insurance Commission said State Farm General’s request raises “serious questions about its financial condition” and that the agency will “urgently” respond to the request. State Farm General is the subsidiary of State Farm Mutual Automobile Insurance Company that operates in California. The subsidiary is the state’s largest provider of fire insurance, with more than 2.8 million policies in California, according to the company.
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