State Farm requests rate hikes in California due to wildfires, facing financial instability

From CNBC: 2025-04-10 14:05:00

State Farm is seeking approval for a significant rate hike in California following the devastating Los Angeles wildfires. The insurer has already paid out over $2.75 billion in claims and estimates direct losses to be around $7.6 billion. The company is requesting a 17% increase for homeowners and 38% for renter dwelling policies.

Insurance regulators are considering State Farm’s request for a rate hike after S&P Global placed its California subsidiary on a “CreditWatch Negative.” The insurer is facing financial instability, with the California market deemed unsustainable by economists. The state is implementing a Sustainable Insurance Strategy to address systemic issues and create a stable marketplace.

Despite the California Department of Insurance supporting State Farm’s rate increase, advocacy group Consumer Watchdog is against it. The group believes the insurer has not justified its request for a rate hike, especially after lowering it from 22% to 17%. Consumer Watchdog is pushing for transparency and accountability in State Farm’s proposal.



Read more at CNBC: State Farm pleads for emergency rate hikes on California homeowners