State Farm wants to hike insurance rates in California by 22% just weeks after fires tore through LA
State Farm wants to hike insurance rates in California by 22% just weeks after fires tore through LA
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Climate-fueled wildfires have led many insurers to pull out of the Golden State in recent years. State Farm Insurance, the largest insurance company in California, is asking regulators for the OK to raise property insurance rates by 22 percent just weeks after fires ripped through Los Angeles leaving thousands homeless. The insurance group has already paid over $1 billion dollars to customers since the beginning of the month, State Farm said.
![[Thousands of people lost homes in the Los Angeles fires. Many insurance providers have pulled out of the state in recent years amid concerns of growing costs thanks to extreme weather]](https://static.independent.co.uk/2025/02/04/16/57/GettyImages-2196865272.jpeg)
“With nearly three million policies in force, including more than one million homeowners customers, SFG needs your urgent assistance in the form of emergency interim approval of additional rate to help avert a dire situation for our customers and the insurance market in the state of California,” the company wrote to California Department of Insurance Commissioner Ricardo Lara. These new interim rate increases for State Farm would help to avert a “dire” situation for the policies issued in California, State Farm asserted. This comes following an outstanding filed rate increase pending since last June. If approved, rates would change on May 1.
“Insurance will cost more for customers in California going forward because the risk is greater in California,” State Farm said, adding that they “must appropriately match price to risk.”. A request for comment from State Farm was not immediately returned. Insurance group migration is tied to climate impacts, although that is not something State Farm specifically cited. A report released Monday found that there is a “feedback loop” between unprecedented levels of property damage from climate change-related events like these wildfires to consequences for policyholders.
By 2055, the climate risk financial modeling company First Street estimates that unrestricted risk-based insurance pricing would drive a 29.4 percent increase in average payments to keep a policy active. Wildfires like these are expected to intensify and become more frequent due to climate change. January’s Eaton and Palisades fires were some of the state’s most destructive in history, tearing across 57,000 acres and leading to the deaths of at least 29 people. The fires have since been put out after weeks of life-threatening Santa Ana winds.
