California Insurance Commissioner Ricardo Lara met with representatives from State Farm General and Consumer Watchdog, a consumer advocacy group, on Wednesday to discuss the insurance company’s request to raise rates on homeowners, renters, and rental property owners.
State Farm General, the state’s largest home insurer, is proposing rate increases of 22% for non-tenant homeowners, 15% for both renters and condominium owners, and 38% for rental dwellings. If approved, these hikes would take effect on May 1.
The company is urging California’s Department of Insurance to approve the increases quickly, warning that failure to do so could negatively impact the 2.8 million policies it currently holds. Although Commissioner Lara previously rejected the request on February 14, he has agreed to reconsider the proposal following the meeting, with a final decision expected within two weeks, according to CalMatters.
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In a statement, State Farm General defended the proposed hikes, citing increased risks in California. “Insurance rates must reflect the actual cost of risk. This approval is necessary to ensure financial stability and allow us to rebuild capital,” the company said.
Consumer Watchdog, however, is challenging State Farm’s justification, arguing that the company is prioritizing its Wall Street credit rating rather than financial necessity. The group pointed to S&P Global’s assessment, which gives State Farm Mutual and its subsidiaries an AA rating—the second-highest possible—while noting that the company holds $194 billion in reserves.
This latest request comes after State Farm proposed an even steeper rate increase last June—30% for homeowners, 36% for condo owners, and 52% for renters. That proposal remains under review.
Since 2023, State Farm has stopped accepting new property insurance applications in California, citing financial pressures. Several other insurers have followed suit, further straining the state’s insurance market. Commissioner Lara has previously expressed concerns about the company’s financial standing and will weigh those factors as he reviews the latest request .
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