California OKs State Farm Rate Hike After Wildfires

California Insurance Commissioner Ricardo Lara has approved State Farm's emergency request to raise homeowner insurance rates by an average of 17%, following major January wildfires in Los Angeles that left the insurer with over $7 billion in claims. The approval, recommended by an administrative law judge after a three-day hearing, permits rate hikes of 15% for renters and condos and 38% for landlord rental dwellings, and requires a $400 million cash infusion from State Farm's parent company. State Farm, which initially sought a 22% increase, agreed to halt new mass nonrenewals through the end of 2025 as part of the deal. The interim rate hike, described as a 'rescue mission,' aims to keep State Farm in the California market amid widespread insurer withdrawals due to wildfire risks. Consumer advocates and policyholders have criticized the decision, citing delayed or inadequate claims processing. A full hearing on permanent insurance rates is scheduled for the fall.