State Farm Seeks Emergency Rate Hike in California After $1B Wildfire Payout

State Farm Insurance is seeking an emergency rate increase in California, set to take effect May 1st, following the devastating wildfires in Los Angeles. The company reports it has already paid out over $1 billion to cover approximately 9,500 claims related to the Southern California fires.

On Wednesday, California's insurance commissioner met with State Farm officials to discuss the proposed rate adjustment. State Farm General Insurance Company, the largest insurer in the state, stopped issuing new policies in California in May 2023 and later declined to renew thousands of existing policies in 2024 due to rising risks and costs.

According to Consumer Watchdog, homeowners insured by State Farm could see their annual premiums increase by as much as $600 under the proposed rate adjustment.

If approved, the increase will take effect just ahead of California’s peak wildfire season, putting additional pressure on homeowners already facing a tightening insurance market.

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