State Farm will raise the rates of some Californian customers by over 50%, as it weighs up its future in The Golden State.
In a request to the California Department of Insurance the subsidiary of the company requested that homeowners’ insurance policies be increased by 30%, condo policies, by 36%, and renter policies, by 52%. State Farm General Insurance Company (State Farm General) is working to ensure its sustainability in California, the company stated in a press release. State Farm General Insurance Company (State Farm General) is changing its rates due to increased costs and risks. This is necessary to keep the promises made to customers every day.
State Farm is California’s largest home insurer. The company has taken several steps in recent years to reduce its exposure within the state.
Last year, the insurance giant announced that it would no longer accept new home insurance requests in California because of “historic” increases in construction costs and inflation.
In March, the company announced that it would cancel 72,000 policies for homes and apartments in the state due to inflation, increased regulatory costs, and the risk of catastrophes. California’s Insurance Commissioner, Ricardo Lara referred to this situation at the time as “a crisis” and has now raised further concerns after the company requested rate increases.
Lara stated in a press release that “State Farm General’s latest rate filings raise grave questions about its financial situation.” This could affect the residential property insurance markets of California and millions of Californians.
Lara stressed that rate increases must be approved by the California Department of Insurance. State Farm’s rate was increased by 6.9% in January 2023. In December, an intervenor group approved the 20% increase.
Lara stated, “We will use the Department’s investigative tools to find out the truth about State Farm’s financial condition.” We take this process very seriously.
