State Farm is looking to raise insurance rates in a massive rate hike for some California customers by more than 50% as the insurance giant weighs its future in the Golden State. In a filing to the California Department of Insurance, the company’s subsidiary in the state requested to hike homeowners’ insurance policies by 30%, condo policies by 36%, and renters’ policies by a whopping 52%.
Reasons Behind State Farm Seeking Massive Rate Hike
The proposed rate hikes follow a previous 20% increase approved last December. State Farm attributes the need for these increases to rising costs and risks, including wildfire risks and historic construction cost increases outpacing inflation. The company aims to ensure its long-term sustainability in California and encourages policyholders to discuss their concerns with local agents.
Regulatory Response and Broader Impact
The California Department of Insurance must approve these changes, and Commissioner Ricardo Lara has raised concerns about the potential impact on consumers and the overall residential property insurance market. As climate change continues to exacerbate wildfire risks, California residents face growing challenges in securing affordable insurance.
Resources
“State Farm again is seeking huge increases in home insurance rates in California”, By Jordan Valinsky and Ramishah Maruf, CNN, July 2, 2024
Photos ( in order of appearance)
- Author (A mcmurray), CC BY 2.5, Link
- Photo by Pixabay: https://www.pexels.com/photo/person-near-fire-266487/
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