A state farm logo is seen in front of the State Farm Insurance Office on February 03, 2025 in Larkspur, California.
Justin Sullivan | Getty Images News | Getty Images
The State Farm this week is making a case for California’s home owners to increase a rate of rate that can be important for the insurance company’s future.
The state’s largest property insurance company needs approval to increase its rates on consumers, and it is applicable to increase the emergency rate. The company argues that additional funds are needed to promote capital after the catastrophic forest fire of Los Angeles and to prevent rapidly serious financial situation.
The State Farm General, which is the National Parents Company’s California arm, is presenting his case to increase the rate before the Administrative Judge in Auckland after the State Insurance Commissioner, Ricardo Lara.
The three -day hearing is scheduled for Thursday.
The state form situation is uncertain. A California department’s insurance lawyer compared it to the Titanic, saying that the iceberg is in the eyes, but there is still time to bend the ship.
“If we don’t, then 3 million California is going into the water and there are not enough lifeboats,” he was warned by a lawyer, Nikki McCainy.
According to Eco Weather, a historic forest fire trapped in Los Angeles in January reduced the total $ 250 billion to $ 275 billion to $ 275 billion.
The State Farm General has about 20 % of California’s homeowners, with about 3 million policies. The insurance company has so far paid more than 75 2.75 billion claims filed as a result of the LA Wild Fire, and it is estimated that direct damages associated with the fire have dropped by about $ 7.6 billion, although insurance will reduce its losses to $ 612 million.
In February, the Insurance Company requested that the insurance regulators approve the rate of 22 % on home owners. After that he has reduced his application to a 17 % increase. The state farm is applying for a 38 % increase on tenants’ residence policies, which is coverage for landowners, and a 15 % increase for tenants.
The State Farm General’s lawyers said on Tuesday that if the rate was approved, it also agreed to withdraw 400 million funds from its parents’ company.
In February, S&P Global placed the State Form’s California subsidiary and its AA credit rating on “credit watch negative”, citing 5 years of weak underdoging performance and the destruction of the capital.
Prior to the destructive LA Wild Fire, insurance companies suffered major losses in the state over the past decade due to frequency and natural disasters increases and sizes. Insurance Commissioner Lara, who is not selected, is not fixed, has been hated for approval of a significant rate for both homeowners and auto insurance.
Meanwhile, according to the Insurance Information Institute, the state pays the highest price in claims and expenses in the state compared to the premium. As a result, the new business of many insurance is limited or to abolish its policies in the state.
The State Farm decided to stop writing new insurance policies of homeowners in California in May 2023. Next year, it announced that it would not renew 72,000 policies, including 30,000 property insurance policies for landowners and 42,000 trade apartments policies, citing financial volatility and increasing threat.
During an administrative hearing this week, economist David Appeal described the California market as unstable and said it had been dramatically damaged. He said that the state’s last resort insurance company, a fair project, after which many of the landlords fled after being dropped by their insurance, have increased astronomically with insufficient capacity.
The state has developed a “sustainable insurance strategy” that creates a framework to allow insurance companies to use destructive modeling and re -use insurance costs when creating their prices. The purpose is to smooth the process through which these rates have been approved.
Janet Rose of the Insurance Information Institute said that the implementation of the project is very important to correct the implementation of the project this year, which has led to an insurance crisis and is an essential step towards creating a more stable market in California.
The appeal testified that he believed that a 17 percent emergency hike was being requested by the state form, which would result in financial stability for the insurance.
The California Department supports the request for an increase in the Insurance State Farm rate, but the lawyer group is advocating against the increase in consumer care rates.
“The company has not required a lawsuit under the law. His proposal is not even permanent. Earlier, he wanted 22 %. Now he wants 17 %,” William Pletcher, the lead attorney of the Consumer Watch Dog, said in a press release.
“We are happy that the money has been reduced, but still needs to justify it, and there is no state form,” he said.
