Following the destructive wildfires in California, State Farm, the state’s largest private insurer, is seeking approval from the California Department of Insurance for significant rate hikes averaging 22% for homeowners.
Renters and condo owners could face a 15% increase, while rental dwellings may see a 38% rise in rates.
The big picture: State Farm justified the proposed rate hikes, citing the need to prevent a dire situation.
- The insurer emphasized that the increased rates are necessary for handling the substantial costs associated with processing claims related to the wildfires.
- As of February 1st, State Farm General had already paid out over $1 billion to customers for more than 8,700 claims, making these wildfires the costliest disasters in the history of the insurer.
- The rate increases are expected to go into effect on May 1, 2025, as per the open letter sent by State Farm to the California Department of Insurance.
