State Farm requests another rate hike, 1 week after CA approved the last one: Here's how much
SAN FRANCISCO -- State Farm wants to raise property insurance rates again -- right after California policyholders were just slapped with a slew of increases, approved last week.
If granted, it would give State Farm some of the rate hikes they originally asked for last June -- and they're substantial increases.
Here's a breakdown.
Starting in June, State Farm will raise premiums by 17% for homeowners. If this latest request is granted, the company could push that figure as high as 30% by the year 2026.
Meanwhile, condo owners and renters will face a 15% increase this June, but this latest request wants to raise that figure to 36% for condos and 52% for renters next year.
"This is a real issue; the company hasn't produced the documents it needs to show that these rates are justified and now they want more... That's just greedy. That's just plain greedy!" said Jamie Court, President of Consumer Watchdog.
RELATED: CA approves State Farm's emergency rate hike; increases as high as 38% start June 1
Consumer Watchdog is the only group fighting the rate hikes, arguing policyholders shouldn't have to pay for State Farm's mistakes.
"Why should policyholders pay for State Farm's mismanagement? I don't think the Commissioner has answered that. I think he's just giving into whatever the company wants," Court said.
California Department of Insurance Deputy Commissioner of the Communications and Press Relations, Michael Soller, told 7 On Your Side: "They want more? We want more data, more transparency, more policyholders served, and more policies written in wildfire distressed areas. 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."
State Farm's latest request includes no change in the rate hikes for rental dwellings, which are policies that protect landlords who rent out their homes. Those properties will face a 38% rate hike this June -- that was approved earlier this month.
RELATED: CA insurance boss not present at hearing as State Farm makes case to raise insurance rates up to 38%
State Farm released a statement regarding the latest request: "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. The overall request of 30% would not be on top of the 17% interim rate change. State Farm General is still pursuing the full rate request. A hearing on the full rate request is expected to be held this year."
"They're not even saying they're going to stay in the market and continue selling after next year! So we're not getting anything for all these extra rates we're paying," said Court.
Court added State Farm's parent company has $140 billion in reserve assets.
"It could give this company money if it needed it and we don't even think it needs it!" Court said.
None of these new rate hike requests are set in stone.
All of them will have to be discussed during the next hearing in October, where State Farm will be expected to justify these requests with data.
RELATED: What happens if CA FAIR Plan goes bankrupt? Here's how it could affect policyholders
On April 8 and 9 of this year, the California Department of Insurance hosted a hearing in Oakland to determine if State Farm should be granted its previous request for an "emergency rate hike." At the time, it was State Farm's third request in just over a year.
Under state law, a thorough review of these requests is required to determine whether these increases are justified. During a previous meeting between State Farm and the commissioner, the company said it could cover claims from the January Los Angeles fires, but deemed the fires left State Farm's financial condition in a "dire" state.
An administrative law judge approved State Farm's request on May 13.
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