Following last week’s approval of a 17% rate hike for homeowners by California Insurance Commissioner Ricardo Lara, State Farm Insurance is now seeking an additional rate hike.
State Farm representatives had initially sought a 30% rate increase in June of 2024.
On Tuesday, a company spokesperson clarified that the company was not seeking 30% on top of the hike approved by Commissioner Lara last week. Rather, the company is seeking an 11% hike to get closer to the originally request 30% hike.
“We are pleased that Commissioner Lara approved the interim rate of 17% for State Farm General Insurance Company, this change only addressed part of the original request of 30% filed in June 2024,” the spokesperson said.
“The overall request of 30% would not be on top of the 17% interim rate change,” the spokesperson continued. “State Farm General is still pursuing the full rate request.”
Jeff Marples, a realtor with over 20 years of experience in San Francisco and Marin Counties, warns that these increases could further hinder market recovery.
“Over the last 18 months or so, HOAs have increased in the city and beyond… Simply a lot of people just can’t afford it so I think a lot of people are going to be on the sideline until rates come down,” said Marples, a realtor with Luxe Places International Realty.
Joy Chen, organizer of the Eaton Fire Survivors Network, expressed concerns over insurance claims, stating, “You have to keep on paying your mortgage, now you have to go out and find rent a new place to live so you still have all of these costs that your company, your insurer, is supposed to help you cover.”
Chen highlighted the struggles faced by fire victims in the area, noting that many claims have been delayed or denied by State Farm. She emphasized the potential impact of approving the original 30% rate hike, describing it as “devastating.”
“You greenlight systemic abuse for everyone. You send a message, which is chilling, to every Californian which is that you can pay your premiums decade after decade but if disaster strikes your insurer might vanish and your government might look the other way,” Chen said.
A representative with the California Department of Insurance clarified that the requested rate increase was the same one State Farm asked for last June. Before approving additional rate hikes, the CDI said it would hold a full rate hearing to gather the facts.
“They want more? We want more data, more transparency, more policyholders served, and more policies written in wildlife distressed areas,” a CDI spokesperson said. “State Farm wanting a rate increase doesn’t change the law. All rates must be justified so consumers don’t pay more than is required.”
Additionally, State Farm is seeking increases on the approved interim rate hikes for condominium owners, renters, and rental dwellings.
KRON4 journalists, KTLA’s sister station, gathered all the facts for this article. Artificial intelligence assisted in converting the article into this format. KRON4 staff edited and approved it.