It seems that the largest insurance company for homeowners in California gets a significant increase in prices after billions of dollars from the Los Angeles fires and a withdrawal in writing new policies in the state.
Administrative Law Judge Karl Celgamen recommended that the temporary prices of the farm be set on Monday. California Insurance Commissioner Ricardo Lara still has to obtain final approval.
Specifically, the HO-3 line of State Farm will get a 17 % increase, 15 % in the tenant/apartment line, and an increase of 38 % in the rental residence, while the converted carrier to refrain from a new round of non-GMT during the end of 2025.
Related: In the wake of the destroyed Los Angeles fires, the residents begin to rebuild
Temporary rates remain temporary and are subject to a full hearing process.
On Tuesday, the S&P Global Ratses reduced its financial rankings and credit rating on the company that includes state Farm General Insurance Co. To “A+” from “AA”.
Categories on credit with negative effects remain, according to an announcement from the S&P.
“The classification procedure indicates the uncertainty related to the support of the capital from the government farm group, raising questions about the evaluation of the SFGI group status and the associated classification effect,” says the advertisement. “The company has achieved a weak subscription performance over the past five years, with potential profits and capital pressures in 2025. This was largely from the last forest fires in California and led to the deterioration of capital near the level of organizational accredited control (ACL).”
During the weakness of performance and head of capital, State Farm did not provide any capital support to SFGI until after the reinsurance agreements. “We are also concerned about the ambiguity of the California Ministry of Insurance about the approval of prices,” says the statement.
The Consumer Monitoring Authority, which opposed the state’s farm requests to obtain a high price, said that the decision will make consumers pay now and allow the state to wait months before justifying the rise is “a great disappointment for consumers.”
“The proposal approved by voters 103 says that raising prices should not come before justifying the rate, but this is what happened here,” the statement continues. “We urge the commissioner to reject the proposed decision so that fees are not imposed on the document holders on the farm, many of whom are struggling to obtain their claims that the company pays after the Los Angeles fires,” said Carmen Baller, CEO of the Consumer Monitoring Company.
Lara’s office released the following statement through a spokesman for the California Ministry of Insurance:
“California residents deserve a process based on fairness, transparency, and integrity – not politics or positions. For this reason, I requested an independent review of the evidence by the Administrative Law Judge, who presented a proposed decision. This session has been ordered to ensure that the parties have the opportunity to present their arguments before the neutral judgment. I am compatible with all facts. Protecting all the agents of the status and integration farm.
State Farm stated in response to the comment request:
“We thank the administrative law judge for taking care of this important issue. We look forward to the final commissioner’s decision.”
The request for the Emergency rate in California, which was submitted in February, was temporarily approved in March by Lara, which made the height dependent on the company that justifies increasing the rate with data during a general hearing.
Then the request was dropped to 17 % after an early hearing in April, during which the company’s lawyers presented the California Ministry of Insurance and the end of the consumer as arguments to determine the request of fate of the state.
Related: a draft law to tackle wild crises in California and insurance crises through the Legislative Authority
State Farm put some of its problems on exotic La fires, which destroyed more than 11,500 homes. As of March, the transportation company has reported to pay $ 2.5 billion to Wilfires fires in January.
The repercussions of forest fires have touched many large transport companies and made the market in California more strict, with high rates and high levels of anxiety. According to the Ministry of Insurance in California, 37,749 fire-related claims were submitted and $ 12.1 billion were paid.
The losses have been consistent at the bottom and even the state holder in the last resort. In February, Lara agreed to request a just plan in California, to conduct a billion -dollar rating on insurance companies in the acceptable market to cover claims of forest fires.
Bloomington, the Illinois -based government farm, said at the time of its initial request that the necessary increases to align the cost and risks, and enable the state farm to rebuild the capital. Over the past nine years, the lack of alignment means that for every dollar collected in a premium, the transport company spent $ 1.26, which led to cumulative subscription losses more than $ 5 billion.
In addition to state FARM problems, the company is also part of a lawsuit filed in Los Angeles claims that the main insurance companies that colluded to reduce coverage in California communities are at risk of forest fires and forcing homeowners on a fair plan.
Insurance companies, including State Farm and 24 other companies carrying 75 % of the California home insurance market, were part of a “illegal plan” in violation of anti -monopoly laws in California and unfair competition laws, according to one of the lawsuits filed in April.
