State Farm Insurance headquarters in Bloomington, Illinois.
California legislators representing Altadena-area fire victims want Insurance Commissioner Ricardo Lara to investigate State Farm’s market conduct and freeze any rate hikes until the fire victims are fully recovered.
Led by state Sen. Sasha Renée Pérez (D-Alhambra) and Fifth District Supervisor Kathryn Barger, the LA Times reported the lawmakers singled out State Farm General at a news conference on Monday.
“We demand that investigations into companies like State Farm be completed swiftly within the next 60 days, and rate hikes frozen until survivors are made whole,” Pérez said.
In May, Commissioner Lara approved State Farm’s emergency 17% rate hike request after an administrative law judge ruled in favor of the carrier on May 13. The ruling stemmed from a three-day hearing in April and also required the company receive an immediate $400 million cash infusion from its parent company to address its serious financial condition.
“Our goal aligns with fire survivors: we want individuals to recover on their own terms,” Lara said in a statement sent to PropertyCasulty360. “To hold insurance companies accountable, I launched a thorough investigation into State Farm's wildfire claims. The severity of our insurance crisis and the suffering of countless Californians require us to get this right. We must empower our Department's experts to do their jobs to protect consumers, and that is my intention.”
The financial crisis for State Farm began in wake of the LA County wildfires in January when the state’s largest home insurer requested an immediate 22% rate increase for homeowners, along with a 38% increase for rental dwellings and a 15% increase for renters and condo owners.
Lara rejected the carrier’s initial request in February, saying the company had not shown why the increase was needed.
“State Farm customers are being helped by our teams on the ground in Los Angeles County and an overwhelming majority are satisfied with our service,” a State Farm spokesperson told PropertyCasulty360. “To date, State Farm has received over 13,000 claims related to the fires and paid over $4.5 billion to our California customers, more than any other insurer.”
Currently, State Farm insures roughly 250,000 homes and 880,000 automobiles in LA County. The company insures over one million homes and more than four million autos across the state.
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