State Farm General, State Farm’s California subsidiary, has recently submitted a request to the California Department of Insurance for an increase in insurance rates for homeowners, condo owners and renters in the state.
The proposed rate increases are substantial, with plans to raise rates by 30% for homeowners, 36% for condo owners, and 52% for renters on average, as reported by the San Francisco Chronicle.
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The big picture: This rate hike is said to be the largest sought by State Farm to date, potentially impacting millions of California consumers and raising concerns about the overall integrity of the residential property insurance market, according to California Insurance Commissioner Ricardo Lara, who spoke to the Los Angeles Times.
- Lara emphasized that the California Department of Insurance will utilize all investigatory tools available to assess State Farm General’s financial condition and its impact on consumers.
- State Farm General has attributed the rate changes to increased costs and risks, stating that the adjustments are necessary for them to fulfill their commitments to customers while striving for long-term sustainability in California.
What they’re saying: “State Farm General Insurance Company is working toward its long-term sustainability in California. Rate changes are driven by increased costs and risk and are necessary for State Farm General to deliver on the promises the company makes every day to its customers,” a company spokesperson told KTLA.
Flashback: In addition to seeking rate hikes, State Farm had announced plans in March to non-renew 72,000 policies in California, and last year, they stopped accepting new insurance applications for all business and personal property in the state.
- These actions by State Farm come amidst a trend where other insurance companies, such as Allstate, have also announced similar moves, potentially impacting the insurance landscape and coverage options for California consumers.
