Latest news with #StateFarmGeneral
Business Mayor
22-05-2025
- Business
- Business Mayor
State Farm pursues additional 11% rate increase in California after emergency rate hike approval
Condo owners and renters could see a larger jump in insurance costs as State Farm General pursues an overall 30% rate increase for homeowner policies in California. This comes just a week after the company was granted a 17% emergency interim hike, down from the nearly 22% increase it originally requested, following a ruling approved by the insurance commissioner, Ricardo Lara. State Farm confirmed to the Guardian that it plans to seek an additional 11% rate hike the company had proposed last year. First reported by the San Francisco Chronicle, State Farm says these increases are necessary due to 'severe capital depletion', especially after the devastating Los Angeles county wildfires. If approved, the average annual premium could rise by about $600 for homeowners, $163 for condo owners and $30 for renters, the Chronicle reported. A spokesperson for the California department of insurance told the Guardian that a rate hearing on the same request is scheduled to 'get to the facts'. 'They want more? We want more data, more transparency, more policyholders served, and more policies written in wildfire distressed areas,' a spokesperson for the department said in a statement. 'State Farm wanting a rate increase doesn't change the law. All rates must be justified so consumers don't pay more than is required.' The increase will apply to all of the roughly 1 million homeowners State Farm insures in the state. The next hearing is scheduled for 20 October. State Farm General has said that the rate hike intends to help 'stabilize' the company's financial position and ensure its ability to serve Californians over the 'long-term'. The company said that the increase was not to cover wildfire losses, but rather a 'critical first step' in restoring its overall financial health, which is essential for paying future claims. Read More Private healthcare boom fuelled by NHS waiting lists 'While we are pleased that Commissioner Lara approved the interim rate of 17% for State Farm General Insurance Company, this change only addressed part of the original request of 30% filed in June 2024,' a spokesperson for State Farm General Insurance Company said. Back in February, State Farm General estimated its direct wildfire-related losses at about $7.6bn, including both reported and anticipated claims. 'We remain deeply concerned about the financial position of State Farm General, as it is difficult to match price to risk in California,' the insurer said in a May update. In June of last year, the company sought a 30% rate hike for homeowners' policies, as well as a 36% increase for condo owners and a 52% increase for renters. The sudden increase raised questions about the insurer's financial stability. State Farm chose not to renew fire insurance for 1,626 State Farm customers in the Palisades neighborhood in 2024, according to California's insurance office. They represented about 70% of State Farm's market share in Pacific Palisades, according to the San Francisco Chronicle. skip past newsletter promotion Get the most important US headlines and highlights emailed direct to you every morning Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy. We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion 'This decision was not made lightly and only after careful analysis of State Farm General's financial health, which continues to be impacted by inflation, catastrophe exposure, reinsurance costs, and the limitations of working within decades-old insurance regulations,' the insurer said. The consumer advocacy group Consumer Watchdog said it had urged Lara to reject the emergency interim rate increase during a hearing in April, stating that State Farm General had 'failed to meet the legal standard required under California law to justify a mid-proceeding rate hike'. The group also questioned how fair the proposed settlement was between the department and State Farm. They cited testimony from State Farm's expert, Dr David Appel, who claimed that the interim rate increase poses 'no risk to policyholders'. 'Dr Appel evaluated the settlement from State Farm's perspective alone,' said William Pletcher, litigation director at Consumer Watchdog. 'But $40 or $50 a month is a serious hardship for California families already struggling to stay afloat.' The already-approved rate hikes will appear on homeowners' bills at their next renewal date after 1 June. An additional rate increase, if approved, would take effect at each customer's first renewal in 2026, according to the Chronicle.
Miami Herald
21-05-2025
- Business
- Miami Herald
State Farm seeks to boost California home insurance rate hike to 30%
A week after winning emergency approval to raise Californians' home insurance premiums, State Farm is seeking to boost that rate hike even higher to 30%. On May 13, the state's largest insurance company got the OK from regulators to increase rates by an average of 17% starting next month. State Farm secured the expedited rate hike after asserting it was in financial distress and expected $7.6 billion in claims arising from the deadly Los Angeles wildfires in January. The "interim" rate increase, however, was only part of a 30% hike the company asked for in June 2024. To reach the full amount, State Farm filed a request Monday for an 11% increase starting next year, on top of the already approved 17% increase. Since the hikes would happen sequentially, they would have the effect of raising rates by 30%. State Farm is also requesting to raise rates by 36% for condos and 52% for renters. The California Department of Insurance said it will hold a public hearing in October to continue gathering information from company officials as they seek to justify the requests. "State Farm wanting a rate increase doesn't change the law," the agency said in a statement. "All rates must be justified so consumers don't pay more than is required." It's unclear exactly how much premiums could go up in the Bay Area or which parts of the region would see the largest rate hikes. Statewide, the insurer covers roughly 15% of homes, totaling more than 1 million customers. When State Farm made its initial 30% request last June, the company asked the insurance department to grant a "variance" to raise premiums higher than usual due to its financial outlook. State Farm General, the company's California-only subsidiary, had issued multiple warnings about its solvency. S&P Global Ratings recently threatened to downgrade the insurer's credit rating, signaling concerns about its financial strength. With the June request still pending, the insurer asked regulators to approve the emergency hike after the devastating fires in Los Angeles County. At the recommendation of an administrative judge, Insurance Commissioner Ricardo Lara last week authorized the 17% hike, slightly less than the 22% the company had requested. In a statement, State Farm said it was "pleased" with Lara's decision but made clear it would continue pursuing the full 30% increase. Consumer advocates, however, said regulators should not have agreed to approve the expedited rate hike - the first time an insurer won such approval in California. They called on the insurance department to closely scrutinize the data that State Farm is now providing to justify another increase. "We've already heard from consumers who are outraged that they just got 17% and now they're asking for more," said Carmen Balber, executive director of Los Angeles-based Consumer Watchdog. State Farm's latest request is the most recent chapter in California's insurance crisis, as providers have ended coverage for hundreds of thousands of policyholders across the state in recent years amid unprecedented wildfire losses. California's insurance rates are closely regulated and, as a result, lower than in many other parts of the country. The insurance industry argues that has left insurers in an untenable situation, even as companies have won approval for repeated rate hikes in recent years. In an attempt to stabilize the faltering home insurance market, state regulators earlier this year finalized a plan that includes allowing insurers to raise rates based on the growing threat of climate change - long an industry demand - in exchange for expanding coverage in parts of the state with the greatest wildfire risk. Consumer advocates, however, contend the plan will lead to huge rate increases and lacks the teeth to force insurers to add homeowners. In the greater Bay Area, insurers who opt into the plan will be expected to write more policies in Marin, Napa and Santa Cruz counties, as well as parts of San Mateo and Sonoma counties and a sliver of Santa Clara County. Insurers would also have to offer new policies for fire-risk homes in suburban areas such as the East Bay Hills and Los Gatos. Copyright (C) 2025, Tribune Content Agency, LLC. Portions copyrighted by the respective providers.
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
17-05-2025
- Business
- Yahoo
California approves State Farm's request for double-digit insurance rate hike
The state of California approved State Farm's request for a double-digit increase in home insurance premiums to help the insurer deal with financial challenges following the wildfires that devastated communities near Los Angeles in January. California Insurance Commissioner Ricardo Lara on Tuesday adopted a proposed court order that will allow State Farm to move ahead with a 17% interim homeowners insurance rate increase in the state. That's less than the insurer's initial request of a 21.8% premium hike. Under the terms of the order, which will take effect on June 1, State Farm's California-based subsidiary will receive a $400 million infusion from its parent company to ensure its solvency, and will participate in a full rate hearing at a later date. The insurer is also barred from implementing block non-renewal programs through the end of this year. "I am balancing all the facts. Protecting all State Farm customers and the integrity of our insurance market is an urgent matter," Lara said. Wildfire Victims Not Receiving Help From Fair Plan: 'I'll Have To Fight With Them For The Next Three Years' "Let me be clear: We are in a statewide insurance crisis, affecting millions of Californians. Taking this on requires tough decisions. This is not a game. This is not a media-driven moment for some to exploit — this impacts people I am committed to protecting," he added. Read On The Fox Business App State Farm General (SFG) said in a statement that the commissioner's interim rate approval is a "critical first step" for the company's ability to continue serving customers in California, adding that it "still must continue building sufficient capital for the future." State Farm Executive Fired Over Comments On Premium Hikes After California Wildfires "With this interim rate approval, SFG will obtain from its parent company, State Farm Mutual (SFM), an advance of $400 million under a surplus note to be issued by SFG, subject to regulatory approval. SFG would be obligated to repay the surplus note balance plus interest over time, subject to certain conditions, because customers outside California should not be expected to pay for risks in California," the company said. It added that it's pausing group non-renewals for the rest of 2025 for non-tenant homeowners, renters and condominium unit owners, as well as rental dwelling properties. State Farm Requests Emergency Rate Hike That Could Raise Californians' Premiums By 38% "We remain focused on helping our customers recover from the wildfires. As of May 12, we have already paid more than $3.51 billion and are handling more than 12,692 claims," State Farm added. S&P Global Ratings downgraded State Farm General's credit rating from "AA" to "A+" due to what it called a "significant deterioration of its capital position and regulatory solvency ratios." The rating change doesn't affect other State Farm group article source: California approves State Farm's request for double-digit insurance rate hike
Yahoo
12-05-2025
- Yahoo
Palisades fire victims seek court order forcing FAIR Plan to turn over claims documents
A Pacific Palisades couple is seeking a court order that would force California's insurer of last resort to turn over claims documents following allegations it has delayed payments to fix their fire-damaged home. The lawsuit by Scott and Lissette Jungwirth accuses the California FAIR Plan Assn. of bad faith, breach of contract and other wrongdoing in seeking a temporary restraining order and injunction to obtain photographs taken by their field adjuster, as well as the adjuster's narrative reports and communications with the plan. The Los Angeles County Superior Court lawsuit said the home remains standing but was infiltrated by soot, ash and fire debris carried inside through a broken window. Testing done by a professional hygienist allegedly found heavy metals, lead, cyanide and other contaminants, which would require demolition, removal of dry wall and flooring, and other repairs. That has forced the couple and their young daughter to live in hotels, with friends and relatives and in Airbnbs, yet the plan has failed to restore the home — and turn over the documents so they can better understand the delay, according to the lawsuit. A spokesperson for the FAIR Plan said it does not respond to pending lawsuits. Read more: Ten victims of the Jan. 7 fires sue the California Fair Plan over smoke damages The litigation was filed by the same two law firms — Edelson and Kerley Schaffer — that handled a lawsuit brought by 10 FAIR Plan policyholders last month that accused the insurer of bad faith and breach of contract because of the plan's alleged refusal to properly investigate and pay for the cleanups of homes damaged by wildfire smoke. The FAIR Plan maintains it covers smoke damage claims as required by law and pays for independent industrial hygienists as needed to properly assess what level of remediation a home requires. Monday's litigation similarly names as defendants the state's biggest home insurers, including State Farm General. The Los Angeles-based FAIR Plan is operated by California's licensed home insurers who govern it and share in the plan's profits, expenses and losses based on their weighted market share. State Farm General did not immediately respond to a request for comment. Dylan Schaffer, one of Jungwirth's attorneys, alleged the plan does not turn over adjuster documents because it would show homes are more badly damaged and in need of more remediation than the plan is willing to pay for. "A lot of these adjusters are telling California FAIR Plan the truth: These houses are really badly damaged," he said. "They need all kinds of work. And California FAIR Plan takes those and they slash them." Read more: Property owners sue California insurance companies over alleged 'collusion' following wildfires The lawsuit contends the plan has for years refused to turn over claims-related documents, despite 2001 legislation arising out of the 1994 Northridge earthquake that amended the insurance code and granted consumers the right to such documents. It also cites a Jan. 6 decision in Fresno County Superior Court that granted a FAIR Plan policyholder who suffered wind damage in 2022 access to her claims documents. Schaffer, who also handled that case, said it involves the same issues encountered by the Jungwirths. The request for an injunction was the second lawsuit filed by a Jan. 7 fire victim against the FAIR Plan in the last two weeks. Luis Cazares, an Altadena homeowner, sued the plan on May 2, alleging bad faith and breach of contract. He alleges his home was made uninhabitable by fire and smoke damage, yet the plan only paid him $55,850, which is inadequate to repair it. The lawsuit notes that levels of lead in residual ash in Altadena exceed the amount deemed safe, according to a study done by the Jet Propulsion Laboratory and Caltech. The case was brought by Bradley/Grombacher, a Westlake Village firm, and Aylstock, Witkin, Kreis & Overholtz, a personal injury and product liability firm in Pensacola, Fla., that has handled mass tort cases and represented homeowners suing insurers over hurricane claims. "I want to get him full relief so he can rebuild his life," attorney Bryan Aylstock said. "He paid the premiums. He deserves that, and it's a shame that so far he hasn't gotten it." Read more: Edison hit with lawsuit saying Eaton fire exposed people to toxic substances The attorneys said they intend to file additional such cases. Last week, they also filed a lawsuit against Southern California Edison that claims the utility was negligent in maintaining its infrastructure, triggering the Eaton fire and exposing people nearby to the fallout of lead, asbestos and other toxic substances. Edison officials have acknowledged that their equipment may have ignited the devastating fire, but have cautioned that the cause remains under investigation. The FAIR Plan also is the subject of twin lawsuits arising out of the Jan. 7 fires filed by property owners against the top property and casualty insurance groups in the state. The litigation filed last month accuses the insurers of colluding to drop homeowners and force them into the plan, where they paid higher premiums but received less coverage, thereby reducing the insurer's liability — an effort that significantly benefited them after the catastrophic Jan. 7 fires, since they backstop plan losses. The FAIR Plan was not named as a defendant, but an insurance industry trade group said the lawsuits "defy logic, advance meritless claims, and we are going to focus on solving the challenges in the insurance market in California.' Sign up for our Wide Shot newsletter to get the latest entertainment business news, analysis and insights. This story originally appeared in Los Angeles Times.
