State Farm Proposes 30% Rate Increase for California Homeowners

Aaron Burrell

One of California’s biggest home insurance companies, State Farm, wants to raise its rates again.

They are asking for a 30% increase for homeowners, 36% for condo owners, and 52% for renters. However, these changes need approval from California’s Department of Insurance.

“This doesn’t change anything for State Farm’s customers right now,” said Deputy Insurance Commissioner Michael Soller.

Soller mentioned that the approval process could take six months. “We have questions about State Farm’s strategy and their long-term plan to serve California consumers,” he said.

State Farm stopped offering new policies in California due to wildfire risks and high construction costs. Last December, they raised rates by 20% for homeowners and condo owners. In March, they announced they wouldn’t renew policies for about 30,000 homes in the state, including 2,000 in San Diego County.

“State Farm is using a part of the regulation that addresses financial solvency issues,” Soller said. “We need to examine the evidence they present to see if it meets the required standards.”

The Department of Insurance will review State Farm’s financial records to see if the rate hikes are necessary for the company’s survival.

Home insurance companies in California don’t make as much profit. According to the National Association of Insurance Commissioners, their losses are about 14% higher in California than elsewhere in the U.S.

“We need insurance companies to be able to pay future claims, so we balance this when reviewing rate requests,” Soller said.

The Department of Insurance is working on new strategies to give homeowners more options in 2025. Soller is hopeful these changes will attract insurers back to California.

10News tried to get a comment from State Farm, but they did not respond in time for publication.

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