Hearing on State Farm’s 22% emergency rate hike request starts this week

This week State Farm will seek to convince state insurance regulators to finalize a steep emergency rate hike for homeowners across California in the wake of the devasting Los Angeles wildfires Insurance Commissioner Ricardo Lara has already signaled his willingness to allow the company to raise homeowner rates by an average of He also granted the state s largest insurer initial approval to increase premiums by for renters and condo owners and for rental owners But before giving his final sign-off Lara ordered State Farm representatives to appear before an administrative judge to justify the company s request a rare move for a rate hike proposal That multi-day masses hearing starts Tuesday in Oakland and could last through Thursday It will be live-streamed on YouTube After the hearing which will also include testimony from consumer advocates who oppose the hikes the judge will issue a proposed decision within days It will then be up to Lara to decide whether to accept it If approved it s unclear how much premiums could go up in the Bay Area or which parts of the region would see the largest rate hikes which could take effect as early as June for a large number of homeowners Statewide the insurer covers roughly of homes totaling more than million customers Related Articles Trump s tariffs threaten to push US home insurance rates even higher California s former insurance commissioner sees grim future more wildfires California s new fire maps won t push up insurance rates industry says States try to rein in physical condition insurers claim denials with mixed results Is California at menace of a new insurance bailout amid increased wildfire danger The insurer s California-only subsidiary State Farm General says the emergency hikes must be approved fleetly to ensure it can pay out future maintains after it expects to cover billion in estimated losses from the wildfires in Los Angeles County State Farm General disclosed it has the money to cover the staggering damage but must raise rates to shore up its shaky financial soundness Even before the multibillion-dollar blazes earlier this year State Farm General had issued multiple warnings about its solvency The provider declared once it pays out maintains from the Los Angeles fires it expects its cash surplus to drop from billion at the end of to million S P Global Ratings in recent months threatened to downgrade the insurer s credit rating signaling concerns about its financial strength Ahead of the hearing Lara called on State Farm General to stop canceling coverage for homeowners in fire-risk areas and to ask its parent company for million to stabilize its financial situation However the commissioner could still approve the rate hikes even if the insurer doesn t commit to those policies