Citing the "dire" financial situation they're facing after the Los Angeles wildfires, State Farm General has asked California officials for an emergency interim rate increase.
The rate hike could work out to an average increase of 22% for California homeowners, State Farm General revealed Monday.
"The costs of the January 2025 wildfires will further deplete capital from State Farm General. Capital is necessary so an insurance company can pay for any future claims for the risks it insures," State Farm General said in an open letter to the California Department of Insurance.
A State Farm insurance company sign sits amid the rubble of a building destroyed by the Palisades Fire on Sunset Boulevard in the Pacific Palisades neighborhood of Los Angeles on January 16, 2025. FREDERIC J. BROWN/AFP via Getty ImagesIn the wake of the wildfires, State Farm General noted that they had already received more than 8,700 claims as of Feb. 1 – paying out more than $1 billion, with the company noting that they expect to pay out "significantly" more.
State Farm General also had a blunt warning to Californians about the future of insurance in the state.
"Insurance will cost more for customers in California going forward because the risk is greater in California," the company stated.
California's Department of Insurance stated that State Farm's rate filings are raising "serious questions" about the company's financial situation, but no action has been taken yet.
"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 California Department of Insurance stated.
No timeline has been given as to when the rate application will be approved or denied.
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