State Farm OK to Hike Home Insurance Rates 17% in California

Insurance Commissioner Lara approves the judge-sanctioned decision, for now.

Sara Getman
Written bySara Getman
Sara Getman
Sara GetmanAssociate Editor

Sara Getman is an Associate Editor at Insurify and has been with the company since 2022. Prior to joining Insurify, Sara completed her undergraduate degree in English Literature at Simmons University in Boston. At Simmons, she was the Editor-in-Chief for Sidelines Magazine (a literary and art publication), and wrote creative non-fiction.

Outside of work, Sara is an avid reader, and loves rock climbing, yoga, and crocheting.

Chris Schafer
Edited byChris Schafer
Chris Schafer
Chris SchaferDeputy Managing Editor, News and Marketing Content
  • 15+ years in content creation

  • 7+ years in business and financial services content

Chris is a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more.

Featured in

media logomedia logomedia logomedia logo
MacKenzie Korris
Reviewed byMacKenzie Korris
MacKenzie Korris
MacKenzie KorrisInsurance Copy Editor

MacKenzie Korris is an insurance copy editor with years of experience in print and digital media. He strives to craft actionable, inclusive copy that fosters smart decision-making through reader autonomy. He has a journalism degree from Saint Louis University.

Published | Reading time: 2 minutes

Advertiser Disclosure

At Insurify, our goal is to help customers compare insurance products and find the best policy for them. We strive to provide open, honest, and unbiased information about the insurance products and services we review. Our hard-working team of data analysts, insurance experts, insurance agents, editors and writers, has put in thousands of hours of research to create the content found on our site.

We do receive compensation when a sale or referral occurs from many of the insurance providers and marketing partners on our site. That may impact which products we display and where they appear on our site. But it does not influence our meticulously researched editorial content, what we write about, or any reviews or recommendations we may make. We do not guarantee favorable reviews or any coverage at all in exchange for compensation.

Why you can trust Insurify: Comparing accurate insurance quotes should never put you at risk of spam. We earn an agent commission only if you buy a policy based on our quotes. Our editorial team follows a rigorous set of editorial standards and operates independently from our insurance partners. Learn more.

Share

California homeowners with State Farm policies can soon expect a 17% rate increase. The increase will go into effect for more than one million home insurance policies that renew after June 1.

The increase also applies to renters and condo policies. A 15% general increase to condos and renters insurance and a 38% increase for landlord insurance will go into effect.

State Farm asked for ‘emergency relief’

In February, State Farm asked the California Department of Insurance (DOI) for a 22% emergency rate increase. The insurer said it needed the increase to stay solvent and cited the 2025 Southern California wildfires in its request.

During a hearing in April, a judge ruled in favor of State Farm’s emergency rate increase. The approval was a “fundamentally fair, adequate, and reasonable decision” due to State Farm’s “precariously weak position,” the judge ruled.

California Insurance Commissioner Ricardo Lara also approved the decision.

“I am balancing all the facts,” he said in a press release. “Protecting all State Farm customers and the integrity of our insurance market is an urgent matter.”

California has the second-fastest rising home insurance premiums in the U.S., according to a recent Insurify report. Insurify data scientists estimated that the state’s homeowners insurance prices will rise 21% by the end of 2025, from $2,424 per year to $2,930.

State Farm’s presence in California

State Farm currently insures over 20% — about a million — of California homes. The insurer dropped 30,000 policies last spring.

The company is no stranger to rate hikes. It requested a 30% increase in 2024 before initially requesting a 22% emergency rate increase in February 2025.

The Eaton and Palisades wildfires caused an estimated $7 billion in damages to State Farm-insured homes, with $3.5 billion paid out for claims, according to a company spokesperson. As a result, the insurer’s surplus dropped from $2.2 billion in 2022 to $620 million in 2024.

Insurers use surpluses to pay out claims, and it helps determine a company’s financial strength. A low surplus could mean State Farm isn’t financially strong enough to pay out claims.

Rate hike still has obstacles to clear

The judge ruled that the 17% emergency rate increase is interim, and the approval comes with stipulations:

  • Lara and the California Office of Independent Review (OIR) will hold another hearing to determine if the increase is excessive and to follow California’s rate increase laws.

  • State Farm has to pay back homeowners plus interest if the OIR finds the increase to be excessive.

  • The insurer can’t send any home insurance non-renewals for the remainder of 2025.

  • The insurer’s parent company, State Farm Automobile Insurance, will grant it $400 million to increase its surplus.

Another hearing won’t happen until October at the earliest.

What’s next: Other insurers follow suit

State Farm isn’t the only insurer increasing rates. Other insurers issuing increases include CSAA, Allstate, and USAA.

Insurer
sort ascsort desc
Rate Increases
sort ascsort desc
Annual Average Premium
sort ascsort desc
State Farm*17%$1,446
CSAA7%$1,403
Mercury12%$1,054
USAA17%$1,102
Allstate34%$605
Rate increases sourced from the California Department of Insurance. Average premiums are Insurify proprietary data.

* Interim rate approval. 

Sara Getman
Sara GetmanAssociate Editor

Sara Getman is an Associate Editor at Insurify and has been with the company since 2022. Prior to joining Insurify, Sara completed her undergraduate degree in English Literature at Simmons University in Boston. At Simmons, she was the Editor-in-Chief for Sidelines Magazine (a literary and art publication), and wrote creative non-fiction.

Outside of work, Sara is an avid reader, and loves rock climbing, yoga, and crocheting.

Chris Schafer
Edited byChris SchaferDeputy Managing Editor, News and Marketing Content
Chris Schafer
Chris SchaferDeputy Managing Editor, News and Marketing Content
  • 15+ years in content creation

  • 7+ years in business and financial services content

Chris is a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more.

Featured in

media logomedia logomedia logomedia logo
MacKenzie Korris
Reviewed byMacKenzie KorrisInsurance Copy Editor
MacKenzie Korris
MacKenzie KorrisInsurance Copy Editor

MacKenzie Korris is an insurance copy editor with years of experience in print and digital media. He strives to craft actionable, inclusive copy that fosters smart decision-making through reader autonomy. He has a journalism degree from Saint Louis University.