(The Center Square) – State Farm, California’s largest property insurer, is seeking the remainder of its originally requested 30% rate hike after getting emergency, temporary approval for a 17% rate hike earlier this month due to cost pressures from the state’s wildfires.
“While we are pleased that Commissioner Lara approved the interim rate of 17 percent for State Farm General Insurance Company, this change only addressed part of the original request of 30 percent filed in June 2024,” State Farm told Newsweek. “The overall request of 30 percent would not be on top of the 17-percent interim rate change. State Farm General is still pursuing the full rate request.”
In its earlier rate hike request letter, State Farm said that over the last nine years, it has paid out $1.26 in claims for every dollar in premiums it has received, leading to $5 billion in losses.
Since the passage of Proposition 103 in 1988, California’s insurance commissioner — who is elected by voters in a statewide election — has had to approve any rate hikes, which has led to rates not keeping up with rising claims and risks.
Consumer Watchdog, whose founder Harvey Rosenfield authored Prop. 103, has opposed any further rate hikes.
“What I think is clear from today’s rate filing is that the commissioner didn’t win anything for Californians in this proceeding,” said Consumer Watchdog Executive Director Carmen Balber in a statement.
In 2023, global credit ratings agency S&P warned that rising property insurance premiums amid sustained departures of property insurance companies could reduce future government revenue and possibly lead to “credit quality deterioration.”
This article was originally published at www.thecentersquare.com
