This looks ugly.
California’s insurance commissioner on Feb. 14 turned down a request by insurer State Farm for an emergency interim rate hike of 22 percent for home insurance, amid a flood of damage claims due to the devastating Los Angeles fires....
...State Farm has requested a 22 percent rate increase for non-renter homeowners, 15 percent for renters, 15 percent for condominium unit owners, and 38 percent for rental dwellings, all effective May 1, 2025, for interim rate increases.
State Farm said it was disappointed by the rejection. “This lack of approval sends a strong message to State Farm General about the support it will receive to collect sufficient premiums in the future to protect Californians against the risk of loss to their homes,” a Feb. 14 statement posted on the company website reads....
It gets worse.
....State Farm said that because the commissioner has not yet approved its request for rate increases submitted last March [!!!?!!], it is now asking the agency to “take emergency action” to approve interim rate increases and allow the company “to start collecting additional premiums much more quickly and possibly begin rebuilding its risk-bearing capacity.”
It also claimed in the letter that over the nine-year period ending in 2024, it paid $1.26 in claims and expenses for every $1.00 collected through premium payments, resulting in more than $5 billion in cumulative losses....
At some point in time, State Farm has to recognize that its NON-California policyholders will rebel at picking up California losses year after year after year....
Maybe now is a good time.
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