State Farm requesting 39% rate hike due to rising liability costs in California
From Yahoo Finance: 2025-04-02 15:55:00
State Farm General is requesting a 39% premium increase for its California Personal Liability Umbrella program, in addition to a 22% rate hike for homeowners insurance. The company cites rising personal liability costs from accidents, medical bills, legal settlements, and claims. Insurance Commissioner Lara has provisionally granted the rate hike but plans a public hearing.
State Farm General is facing financial strain due to billions in claims from California fires. The insurer has paid $2.5 billion on over 10,000 fire claims and expects total payments of $7.6 billion. Despite net losses of $600 million, reinsurance payments from its parent company will help offset the costs.
Umbrella liability policy costs are increasing industry-wide due to higher medical expenses, severe auto accidents, and social media-related libel and slander claims. Coverage costs are rising for all insurers, with annual premiums typically providing $1-2 million in coverage. Rising expenses drive the need for rate hikes.
Insurance Information Institute spokesperson Janet Ruiz notes that umbrella liability policy costs are on the rise for all insurers. Factors include escalating medical bills, severe auto accidents, and increased libel and slander claims. Rising costs necessitate rate hikes to cover the growing number of claims and losses.
Read more: Troubled State Farm seeking a 39% rate hike for umbrella policies