California’s Largest Home Insurer Seeks Dramatic Rate Increase

State Farm’s proposal would raise home insurance rates by 30%, impacting more than 1 million policyholders.

Chris Schafer
Written byChris Schafer
Chris Schafer
Chris SchaferSenior Editor
  • 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
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.

Featured in

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

  • 8+ years editing experience

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.

Featured in

media logo

Published July 3, 2024 at 12:00 PM PDT | Reading time: 2 minutes

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.

State Farm insures roughly one in five California homes, and its recent rate hike proposal has the potential to shift the entire home insurance market in the Golden State.

The state’s largest home insurer — covering roughly 1.2 million California homes — is seeking to raise home insurance policies by 30% in the Golden State. The proposal also aims to raise renters insurance policies by 52% and condo insurance policies by 36%.

“State Farm General’s latest rate filings raise serious questions about its financial condition,” California Insurance Commissioner Ricardo Lara said in an official statement following the rate request. “This has the potential to affect millions of California consumers and the integrity of our residential property insurance market.”

Californians currently pay an average of $1,782 per year for $300,000 in dwelling coverage, according to Insurify data. If approved, State Farm’s proposal would increase that annual cost by more than $500.

The new rate hikes would affect policy renewals starting in 2025.

Insurer says rate increases are necessary

State Farm officials say the increase is necessary as the insurer tries to recoup billions of dollars in losses due to wildfires and severe weather activity across the state. Rising rebuilding costs are also contributing to the proposed rate increase, according to the insurer.

“State Farm General is working toward its long-term sustainability in California,” the company said in a released statement. “Rate changes are driven by increased costs and risk.”

State Farm reported losing $6.7 billion nationwide in 2022 — and an additional $6.3 billion in 2023.

Lara says the California Department of Insurance will closely review State Farm’s financials to judge the validity of its rate increase proposal. “We will use all the Department’s investigatory tools to get to the bottom of State Farm’s financial situation. We take this process seriously,” he said.

The Department of Insurance will review State Farm’s proposal. During the review process, consumer groups could challenge the proposal. A challenge would trigger a public hearing.

State Farm and the Department of Insurance could also meet and negotiate a different rate increase.

State Farm consistently in the California news

The rate increase request isn’t the first time State Farm has made news in the California insurance market recently.

The company stopped writing new homeowners insurance policies in California in May 2023. In March of this year, State Farm announced its plans to drop 72,000 policies across the state. The policies to be dropped were split between homeowners (30,000) and landlord (42,000) policies.

Many of the dropped policies belonged to homeowners living in areas at risk for wildfire damage.

The California Department of Insurance also approved a 20% rate hike for State Farm in that same month.

State Farm hasn’t publicly stated whether this newly proposed rate hike would entice the insurer to start writing new insurance policies in the state again.

What’s next? A tighter market for consumers

California’s Department of Insurance must review State Farm’s rate increase proposal, but if it approves the plan, more than 1 million homeowners could find themselves in a difficult situation. Some may have no option but to seek coverage under California’s FAIR Plan.

California’s Department of Insurance is trying to prevent that.

Lara recently unveiled a draft measure that would allow insurers to use catastrophe modeling when setting insurance rates. In exchange, insurers must commit to doing more business — at least 85% of their California policies — in high-risk areas of the state.

Regulators expect to finalize the regulations by the end of 2024.


Chris Schafer
Chris SchaferSenior Editor

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.

Featured in

media logomedia logomedia logo
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

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.

Featured in

media logo