State Farm seeks 22% home insurance rate hike in California following recent wildfires, sparking concern among victims. Public adjusters and state officials respond to the controversial proposal.
PCAPIA Legislative Conference offers CE-approved educational sessions followed by pre-scheduled meetings with legislators and Insurance Committee staff. Attendees will discuss key issues, highlight the vital role of public adjusting in the claims process, and position PCAPIA as a trusted resource on property insurance matters.
State Farm, California’s largest home insurance provider, is seeking a significant rate increase just weeks after devastating wildfires swept across the state. The company has proposed raising home insurance rates by an average of 22%, coming shortly after their announcement to offer policy renewals for wildfire-impacted homeowners.
State Farm announced it is looking to raise insurance rates on average of 22%. Camilla Rambaldi reports for the NBC4 News at 7 p.m. on Feb. 3, 2025.
Impact on Wildfire Victims
The timing of this proposal has sparked widespread concern, particularly among those still recovering from the fires. Denise Hsu Sze, president of the Pacific Coast Association of Public Insurance Adjusters, voiced strong opposition to the increase.
“I think a lot of people are angry,” Sze said. “They are angry about how this whole fire happened, but a lot of those State Farm clients are disturbed that it’s taking so long to get people out here.”
Standing in the Palisades area, Sze added, “It’s completely outrageous. Most of these people have claims that are open or have lost their homes. It’s not the proper time to hike up.”
State Farm’s History of Rate Increases
This isn’t State Farm’s first attempt at raising rates in California. Previous proposals from June included:
- 30% increase for homeowners
- 36% increase for condo owners
- 52% increase for renters
These earlier requests are still under review.
Response from State Officials
The California Department of Insurance has promised thorough scrutiny of the request. Gabriel Sanchez, press secretary for the Department, emphasized their commitment to protecting consumers: “To protect millions of California consumers and the integrity of our residential property insurance market, the Department will respond with urgency and transparency to recommend a course of action for Commissioner [Ricardo] Lara.”
The Department has also expressed concerns about State Farm’s financial condition based on the new filings.
State Farm’s Position
State Farm defends the rate hike, citing recent disasters and financial pressures. “The costs of the January 2025 wildfires will further deplete capital from State Farm General,” the company stated. “Capital is necessary so an insurance company can pay for any future claims for the risks it insures.”
As of February 1, the company reports:
- Over 8,700 wildfire-related claims received
- More than $1 billion paid to affected customers
State Farm maintains that “Insurance will cost more for customers in California going forward because the risk is greater in California.”
The final decision on these proposed increases lies with the California Department of Insurance, which will review the case with all stakeholders before determining the appropriate action.
Sources
State Farm seeks 22% home insurance rate hike after California wildfires
By Angelique Brenes • Published February 3, 2025 • Updated on February 3, 2025 at 10:42 pm
https://www.nbclosangeles.com/news/local/state-farm-seeks-22-home-insurance-rate-hike-after-california-wildfires/3622739/
PCAPIA Legislative Conference
https://www.pcapia.com/ev_calendar_day.asp?date=2%2F25%2F25&eventid=17