State Farm OK to Hike California Home Insurance Rates — For Now

The insurer must prove it needs a 21.8% emergency increase in April hearing or repay policyholders for the rate increase.

Chris Schafer
Written 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.

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Evelyn Pimplaskar
Evelyn PimplaskarEditor-in-Chief, Director of Content
  • 10+ years in insurance and personal finance content

  • 30+ years in media, PR, and content creation

Evelyn leads Insurify’s content team. She’s passionate about creating empowering content to help people transform their financial lives and make sound insurance-buying decisions.

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John Leach
Reviewed byJohn Leach
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John LeachSenior Insurance Copy Editor
  • Licensed property and casualty insurance agent

  • 8+ years editing experience

  • NPN: 20461358

John leads Insurify’s copy desk, helping ensure the accuracy and readability of Insurify’s content. He’s a licensed agent specializing in home and car insurance topics.

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State Farm can raise homeowners, renters, condo, and landlord policy insurance rates in California — at least until April 8, when the state’s largest property insurer must prove in a public hearing that it really needs the increase.

If it fails to make its case on that day, it will have to repay policyholders for the higher rates, plus interest. Under an agreement with California Insurance Commissioner Ricardo Lara, State Farm will also have to pause non-renewals and seek a stabilizing infusion of $500 million from its parent company.

State Farm’s emergency rate request

State Farm requested a 22% home insurance rate increase in response to damage stemming from wildfires that scorched through Los Angeles communities in January. The insurer argued the increase was necessary to keep State Farm solvent.

California Insurance Commissioner Ricardo Lara initially rejected the emergency rate increase, saying the insurer had “not met its burden” to demonstrate why it needed emergency relief.

But in an informal Feb. 26 meeting with State Farm and consumer advocates, Lara said he’d be willing to grant an interim increase pending a full public hearing. In return, the insurer would need to agree to halt non-renewals and ask its parent company, State Farm Mutual, for funding.

“Look, I understand this is a significant request, one that I don’t make lightly, either because you know, again, our consumers are going to have another rate increase,” Lara said in the meeting. “... We need to see that State Farm is willing to also put some skin in the game.”

Impact of State Farm’s financial woes on Californians

State Farm’s rate request is the insurer’s latest effort to navigate the challenging California insurance market.

State Farm stopped writing new home policies in California in May 2023. In March 2024, the insurer announced it would not renew 30,000 homeowners policies and 42,000 landlord policies. In July 2024, State Farm sought a 30% rate increase for California home insurance policies and a 38% increase for renters policies.

Under the interim deal between Lara and State Farm, the insurer can increase homeowners rates by 22%, renters rates by 15%, and landlord policy rates by 38%. But it must pause non-renewals throughout California, not just in the L.A. area, Lara ordered.

“Currently, too many Californians live in fear of having their insurance policies non-renewed,” Lara said in a press release announcing the interim approval. “This anxiety perpetuates misinformation and discourages consumers from accessing their entitled benefits. This situation is unacceptable.”

What’s next: A deciding hearing

State Farm’s rate hearing will take place April 8, authorized under California’s Proposition 103 insurance regulation. Such hearings are extremely rare. The last one occurred in 2015 and also involved State Farm.

“We will finally get to the bottom of State Farm’s financial condition,” Lara said. “I am confident that my approach will provide Californians with greater choices in a competitive and stable insurance market — exactly what they deserve.”

Chris Schafer
Chris SchaferDeputy Managing Editor, News and Marketing Content

Chris is Insurify’s Senior Editor for home insurance. He’s a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more. He is passionate about breaking down complex subject material to make important information accessible to everyone. 

Chris began his career as a journalist, managing two weekly newspapers, then moving into marketing and content marketing roles. Before joining Insurify, Chris served as the content strategy manager at Siteimprove and as the content manager at Brandpoint, where he managed a team of content creators. 

Away from work, Chris is an active hockey player and proud father of two rambunctious little girls. Chris holds a Bachelor’s degree in English with a minor in mass communications from the University of Minnesota. 

Evelyn Pimplaskar
Edited byEvelyn PimplaskarEditor-in-Chief, Director of Content
Evelyn Pimplaskar
Evelyn PimplaskarEditor-in-Chief, Director of Content
  • 10+ years in insurance and personal finance content

  • 30+ years in media, PR, and content creation

Evelyn leads Insurify’s content team. She’s passionate about creating empowering content to help people transform their financial lives and make sound insurance-buying decisions.

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John Leach
Reviewed byJohn LeachSenior Insurance Copy Editor
Photo of an Insurify author
John LeachSenior Insurance Copy Editor
  • Licensed property and casualty insurance agent

  • 8+ years editing experience

  • NPN: 20461358

John leads Insurify’s copy desk, helping ensure the accuracy and readability of Insurify’s content. He’s a licensed agent specializing in home and car insurance topics.

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