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hatrack

(61,680 posts)
Tue Feb 4, 2025, 07:49 AM Tuesday

State Farm Files Request With CA To Raise Property Insurance Rates By An Average Of 22%; $1 Billion Paid Out So Far

State Farm, the largest insurance company in California, has asked regulators to let it raise property insurance rates by a staggering average of 22 percent, writing in a letter Monday that the recent fires in Los Angeles threaten its finances and are “the costliest in the history of the company.”

As of Saturday, the company had received more than 8,700 claims stemming from the fires and had paid more than $1 billion to policyholders. But in a letter to California’s insurance commissioner, State Farm leaders said, “We know we will ultimately pay out significantly more.” They wrote that previous years’ losses from natural disasters had already weakened the company’s finances, causing its credit rating to be downgraded. Without more capital, State Farm’s rating could drop again, they said, warning that it could jeopardize the more than 2.8 million policies held by Californians.

State Farm General “needs your urgent assistance in the form of emergency interim approval of additional rate to help avert a dire situation for our customers and the insurance market in the state of California,” the company’s leaders wrote.

The emergency request is the most public sign yet of how the Los Angeles fires could threaten California’s insurance market — and send property insurance costs skyrocketing in fire-prone parts of the state. Although the total economic loss caused by the Palisades and Eaton fires are still unknown, analysts’ early estimates have ranged from $50 billion on the low end to more than $250 billion. “Insurance will cost more for customers in California going forward because the risk is greater in California,” State Farm wrote in its message announcing the rate increase request.

EDIT

https://www.washingtonpost.com/weather/2025/02/03/state-farm-california-fires-property-insurance/

https://wapo.st/4hyIluI

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