California Approves 17% Rate Hike by State Farm

California has approved a 17% increase for State Farm’s homeowners policies.

CBS News reports the rate increase is lower than the insurer’s request for a 21.8% hike. California Insurance Commissioner Ricardo Lara announced the rate hike after administrative Judge Karl Seligman issued a ruling on Monday that State Farm had evidence of “extraordinary financial distress” in the wake of the damages created by the Los Angeles County wildfires.

“State Farm must now justify its financial condition and detail its recovery plan in a full rate hearing before a neutral judge and my department’s experts,” said Lara.

The increases will take effect on June 1, following another hearing before a judge. Lara’s office stated the company agreed to “refrain from implementing new block non-renewal programs through the end of 2025.”

Lara defended the rate hike, insisting the approval came after considerable study.

“I am focused on ensuring that State Farm pays its claims to wildfire survivors fully and fairly — and nothing is off the table,” Lara said. “I am balancing all the facts. Protecting all State Farm customers and the integrity of our insurance market is an urgent matter. Let me be clear: We are in a statewide insurance crisis affecting millions of Californians. Taking this on requires tough decisions. This is not a game.”