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2w ago

California Judge Recommends Emergency Rate Hikes for State Farm Policyholders

Insurance Commissioner Ricardo Lara's final decision is expected today, with interim hikes set to take effect June 1 if approved.

FILE - The devastation from the Palisades Fire is shown in an aerial view in the Pacific Palisades neighborhood of Los Angeles, Monday, Jan. 27, 2025. (AP Photo/Jae C. Hong, File)
A judge has cleared the way for State Farm to proceed with a significant rate hike in California that it has sought for months. However, the California Insurance Commissioner still has the final say.
FILE - A firefighter battles the Palisades Fire as it burns a structure in the Pacific Palisades neighborhood of Los Angeles, Jan. 7, 2025. (AP Photo/Ethan Swope, File)
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Overview

  • An administrative law judge has endorsed interim rate hikes for State Farm, including 17% for homeowners, 15% for condos and renters, and 38% for landlord rental-dwelling insurance.
  • The recommendation follows significant financial losses from January's Los Angeles County wildfires, which have cost State Farm over $3.4 billion in claims to date.
  • Insurance Commissioner Ricardo Lara holds the authority to approve, revise, or reject the recommendation, with a decision anticipated later today.
  • A full evidentiary hearing scheduled for October will reassess the increases, potentially requiring refunds to policyholders if the hikes are deemed unjustified.
  • Consumer advocacy groups and wildfire survivors have criticized the process, citing concerns over claims handling and urging delays or investigations into State Farm's practices.