Latest news with #Balber
San Francisco Chronicle
20-05-2025
- Business
- San Francisco Chronicle
State Farm asks for another California home insurance rate hike a week after getting a 17% jump
A week after securing approval to raise home insurance rates by an average of 17%, State Farm General revealed plans to ask regulators for an additional 11% increase, as well as considerably higher rates for condo owners and renters. The 17% increase, set to go into effect in June, was granted last week by Insurance Commissioner Ricardo Lara following a months-long proceeding that was classified as an 'emergency' following the Los Angeles fires. But State Farm had originally requested a 30% rate hike in June 2024 — and now, with the 17% emergency rate hike approved, it wants to return to its original number. The request, if granted, would go into effect in 2026, amounting to an 11% hike on top of the previous 17%. A hearing slated for this fall will allow State Farm to argue for justifying the full 30% rate hike it originally sought, according to new documents filed with the state on Monday. The insurer will also ask for higher increases for condominium owners and renters. In June, rates for those groups are due to go up by an average of 15%, but the new requests would bring that up to 36% for condos and 52% for renters. For rental dwellings policies — a type of insurance that protects landlords who rent out their homes — State Farm is only petitioning for final approval of the 38% rate hike that was initially approved earlier this month. State Farm did not immediately respond to a request for comment. 'They want more? We want more — more data, more transparency, more policyholders served, and more policies written in wildfire distressed areas,' Deputy Insurance Commissioner Michael Soller said in a statement Monday. 'Wanting doesn't change the law. All rates must be justified so consumers don't pay more than is required.' Though State Farm agreed to lower its rate hike request on an interim basis to 17% during a recent hearing before an administrative law judge, the full 30% was never off the table, said Carmen Balber, executive director for consumer advocacy group Consumer Watchdog. Balber's group participated in the rate review process and opposed the 17% rate hike at the April hearing. On Monday night, she said the group had not yet reviewed the new data submitted by State Farm to see whether it justified the large price hikes it's asking for. During the hearing, Lara pushed State Farm to secure a $400 million loan from its national parent company, State Farm Automobile Insurance Co., and to hold off on non-renewing large numbers of customers at once until at least the end of 2025. But Balber noted they made such a promise with only seven months of the year to go. 'What I think is clear from today's rate filing is that the commissioner didn't win anything for Californians in this proceeding,' Balber said. The newly filed documents include data on State Farm's losses from the Los Angeles wildfires. The insurer previously said it expects to pay $7.6 billion in claims from the Eaton and Palisades fires, all but $400 million of which will be paid by its national parent company through its reinsurance agreements — insurance for insurance companies. State Farm has maintained that those losses would warrant a large price hike. When insurance companies apply for rate increases, they let regulators know the maximum increase they feel they could justify under a formula enshrined in state insurance code. It is typically much larger than the rate request they actually ask for. In State Farm's case, it initially told regulators last June it could justify an up to 32.8% hike for homeowners while requesting the 30%. Its latest filing documents indicate the insurer believes its maximum permitted rate hike would be 77%. At the fall hearing, State Farm will be required to defend its requested rate hikes using facts and data, Soller said. A judge could approve the full requests, or the judge could find that even the emergency approved rates were excessive. In that case, the commissioner would order State Farm to refund its customers. 'Commissioner Lara ordered a full rate hearing to get to the bottom of State Farm's rate increase request,' Soller said. 'At the end of the day this is about making sure claims are paid in full and quickly by insurance companies with the financial standing to do that. State Farm will have to justify their rate request and show us their recovery plan in a full rate hearing.' The already-approved rate hikes will appear on homeowners' bills at their next renewal date following June 1. An additional rate increase, if approved, would take effect at each customers' first renewal in 2026.
Yahoo
13-05-2025
- Business
- Yahoo
Proposed Decision Approving $749 Million State Farm Home Insurance Rate Hike Goes to Insurance Commissioner Lara, Says Consumer Watchdog
LOS ANGELES, May 13, 2025 /PRNewswire/ -- A proposed decision recommending approval of State Farm General's request for an interim rate hike was issued by an Administrative Law Judge yesterday and sent to Insurance Commissioner Ricardo Lara. If approved by Lara, the settlement would impose a 17% rate increase for homeowners, 15% increase for renters and condo owners, and a 38% increase for rental dwelling policies as soon as June 1. Read the decision. "Today's decision that would make consumers pay now but allow State Farm to wait months before having to show its math is a great disappointment for consumers. Voter-approved Proposition 103 says a rate hike shouldn't come before the rate justification, but that's what happened here. We urge the Commissioner to reject the proposed decision so State Farm policyholders, many of whom are struggling to get their claims paid by the company after the Los Angeles fires, aren't overcharged," said Carmen Balber, executive director of Consumer Watchdog. Recent serious allegations have emerged regarding State Farm's mishandling of fire claims following the Eaton and Palisades fires in Los Angeles. Numerous policyholders have reported delays, denials, rotating adjusters, and inadequate assessments of damage, leading to financial hardship and widespread criticism of the insurer's claim handling practices. "It adds insult to injury for consumers to be forced to pay significantly more for coverage when some of these same consumers may be simultaneously trying to recover from the fires while State Farm is mishandling their existing claims," said Balber. Under the proposed decision, State Farm's rate hike will be subject to review in a full rate hearing, where the company will be required to fully justify the rate. That hearing is now tentatively scheduled for October. The agreement also promises refunds if the rate is ultimately proved to be excessive. "Refunds will be too little too late for homeowners who are already struggling to pay their home insurance premiums," said Balber. "Nevertheless, we will fully defend consumers' right to fair rates in the upcoming hearings where State Farm will finally have to justify what they want to charge." View original content to download multimedia: SOURCE Consumer Watchdog Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
20-03-2025
- Business
- Yahoo
California's insurance commissioner addresses crisis
The Brief CA insurance commissioner Lara testifies the FAIR insurance plan has enough funds to cover LA wildfire losses Lara says state must focus on fire mitigation efforts to help homeowners and insurance companies continue coverage Lara says he expects rates to stabilize by 2026. OAKLAND, Calif. - The State Assembly Insurance Committee listened to California Insurance Commissioner Riccardo Lara testify about the state of California's home insurance crisis. "If we don't better, how we build, where we build, we're going to repeat past mistakes," Lara testified. WATCH:FULL HEARING VIDEO HERE. Lara reported on some of the reforms he is implementing, allowing insurance companies to use algorithms to tailor policies to individual home's fire risk, instead of pricing rates based on broad, generic, historic data. Lara vowed to demand that State Farm justify its requested rate hike with hard data, when they appear at a hearing on April 8. He also discussed the status of the state's FAIR Plan, an insurance of last resort administered by insurance companies, that has ballooned as many of those companies have canceled Californian's insurance policies. The Assembly Insurance Committee Chair, Rep. Lisa Calderon announced a new bill Wednesday to require two legislators be placed on the FAIR insurance committee, saying the insurance companies and governor's appointees make up the committee, but there is no representation for elected lawmakers. Lara says reform is desperately needed. "It's been 30 years since the last FAIR plan assessment, which was prompted by guess where, wildfires in Altadena, Topanga, Malibu and West LA," Lara said. Critics say Lara is not doing enough. "The regulation that the commissioner passed requiring so- called commitments for insurance companies to move back to wildfire-distressed areas has so many loopholes that it is unenforceable," Carmen Balber, Executive Director of Consumer Watchdog said. Balber says she agrees with Lara's call for more scrutiny of how fire-prone communities rebuild, but wants decisions to be based on local communities, not insurance companies. She also says the state needs to do more to set parameters. "We need a mandate, just like auto insurance for good drivers, that if you do the right thing for your home, you will be covered," Balber said. Lara did testify that fire mitigation efforts are important moving forward, and said rates should normalize once his reforms kick in. "Currently, the rates don't reflect the mitigation that people are doing. So what's the incentive for people to do the mitigation if it's not reflected in their rates or they're not getting these discounts?" Commissioner Lara said. "By the end of 2026, you'll start seeing the insurance companies normalize the rates because they're going to be able to truly reflect the risk of what we're living in."
