California Approves State Farm Rate Hikes After Wildfires

California Insurance Commissioner Ricardo Lara has approved State Farm's emergency request to raise insurance premiums for millions of homeowners, renters, and landlords following the January wildfires in Los Angeles County. The rate hikes, effective June 1, are 17% for homeowners, 15% for renters and condos, and 38% for rental dwellings, which are slightly lower than State Farm's initial request. The decision, recommended by an administrative law judge, requires State Farm to obtain a $400 million cash infusion from its parent company and prevents the insurer from dropping existing customers through 2025. Consumer advocates and wildfire survivors have criticized the move, citing delayed or inadequate claims processing and arguing the hikes worsen burdens for fire victims. The interim rate increases will remain until a public hearing this fall, after which State Farm must justify the hikes or potentially reimburse customers. The situation underscores a broader insurance crisis in California as insurers struggle with wildfire risk and regulatory scrutiny.