Rate hearings are rare and usually scheduled months in advance. This one’s different because California Insurance Commissioner Ricardo Lara called it hastily about a month ago, after State Farm made a unique request: It asked Lara to immediately approve emergency interim rate increases of an average 22% for homeowners, 15% for renters and condos, and 38% for rental dwellings. State Farm said its finances are strained because of the Los Angeles County fires, from which it expects to pay more than $7 billion in claims.
A hearing over emergency interim rates has never happened before.
A U.S Army Corps of Engineers’ contractor clears the remains of a home lost in the Eaton fire on Altadena Drive in Altadena on Tuesday, March 18, 2025. (Photo by Sarah Reingewirtz, Los Angeles Daily News/SCNG)
State Farm has pending rate requests from last summer — a separate rate hearing about those will happen by June — but said it needs to increase rates as soon as possible. Under California law, the public can object to rate increases and intervene, which could then lead to a rate hearing. The insurance department and an intervenor, Consumer Watchdog, have been seeking more information about the company’s finances. While State Farm has said it has provided that information, it is expected to provide further details at this week’s hearing.
The hearing at the insurance department’s Oakland offices will be held before an administrative law judge, who will decide if it needs to take up all three scheduled days, through Thursday. The hearing will be livestreamed. If the judge approves State Farm’s rate increases, they will become effective June 1 and could affect the company’s nearly 3 million customers in the state.
The drama over California’s largest insurer’s rate request comes as Lara tries to restore insurance availability in the state and reduce the number of policies in the FAIR Plan, the fire insurer of last resort. His new regulations took effect at the beginning of the year.
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