State Farm wants 22% rate increase for California homeowners following LA fires
By KTVU Staff I Published February 3, 2025 5:31pm I San Jose I KTVU FOX 2
OAKLAND, Calif. - State Farm has urged California to immediately approve a 22% rate increase for homeowners following the devastating Los Angeles County wildfires.
$1 billion in wildfire claims
What they're saying:
State Farm, California’s largest insurer, said the fire has put the company under increased financial strain. As of Feb. 1, the company has received more than 8,700 claims and has already paid out more than $1 billion to customers.
The company expects to pay out more as new wildfire claims are filed.
"The costs of the January 2025 wildfires will further deplete capital from State Farm General,' the company wrote in a news release. "Capital is necessary so an insurance company can pay for any future claims for the risks it insures."
The Los Angeles County wildfires will be the costliest disaster in the company's history.
‘Dire situation’
Why you should care:
The insurance giant asked the California Department of Insurance on Monday to immediately approve the temporary rate increase to help avert a "dire situation" for the 1 million homeowners it serves in the state. The rate increase would help the company rebuild capital.
The Illinois-based company said insurance rates will cost more in California going forward as the risk of wildfires is greater.
In the past, the insurer discontinued coverage for 72,000 homes in California and stopped issuing new policies in the state due to soaring costs, increased risk of catastrophes and outdated regulations.
The California Department of Insurance has not determined whether it would approve State Farm's request, which will come from Commissioner Ricardo Lara. However, the state department said the request raises questions about State Farm's financial condition.
"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 Lara. The Department will investigate these rate applications thoroughly to ensure Californians are charged the appropriate justified rates," the department said.
Jesse Gary is a reporter based in the station's South Bay bureau. Follow him on the Instagram platform, @jessegontv and on Facebook, @JesseKTVU.