State Farm General, California’s largest insurance company, has filed a 39% interest rate hike on California’s personal responsibility umbrella program.
The California Department of Insurance must approve a fee increase that goes into effect on August 1st, if approved.
The company said it is seeking an increase as “more accidents, medical costs and larger legal settlements and more charges have dramatically increased personal liability costs across the industry.”
State farms that provide renewals to policyholders affected by wildfires in LA County
The new rate hike comes after the company demanded an urgent 22% interest rate hike after a fatal and devastating wildfire in Los Angeles County, and the company’s “disastrous” financial situation.
California insurance committee member Ricardo Lara has temporarily accepted a rate hike. Full approval will be “only if the company is able to justify the data” at the scheduled hearing on April 8th.
“Committee Lala’s actions follow an unprecedented meeting at the Department of Insurance’s Auckland office on February 26, 2025,” the office of the insurance committee said. “During this meeting, state farms can cover claims from Southern California wildfires, but the disaster has made its financial condition worse, and we told the commissioner.”
In addition to tentatively accepting the company’s demands, Lara has called on state farms to stop non-renewal and seek a capital injection of $500 million from the parent company to stabilize the finances.
Source link
