Insurer Aims to Raise Premiums by up to 52% for Some Policyholders by 2026
Just one week after receiving approval for a series of property insurance rate increases, State Farm is requesting even steeper hikes for California policyholders, potentially raising premiums as much as 30% for some homeowners by 2026.
Beginning in June, homeowners insured by State Farm are already set to see premiums climb by 17%, part of a previously approved rate adjustment. However, the company has now submitted a new filing that would push that figure even higher in the coming years.
Condominium owners and renters are also bracing for steep increases. Current approvals call for a 15% increase in June, but if State Farm’s latest proposal is accepted, condo premiums could rise by 36%, and renter premiums by as much as 52% by next year.
Landlords with rental dwelling policies will see a 38% increase beginning this June, a rate hike that was approved earlier this month. State Farm’s new request does not seek to change that particular premium, but consumer advocates argue that all of the increases combined place an undue burden on policyholders.
Consumer Watchdog, a nonprofit advocacy organization, is the sole group formally opposing the requested hikes. The group argues that customers should not be responsible for what they describe as State Farm’s financial mismanagement, and is urging regulators to reject the proposal.
State Farm’s latest request will be reviewed during a public hearing scheduled for October, when state regulators will assess whether the proposed hikes are justified by the company’s financial data. The insurer contends that its operations in California are under significant pressure and that higher premiums are essential to stabilize its position and continue offering coverage in the state.
The proposal puts state officials in the difficult position of balancing the need to protect consumers from unaffordable insurance costs while ensuring that major carriers like State Farm don’t withdraw from the market entirely.
California’s strict regulatory environment has long kept insurance premiums lower than in many other states, but in recent years, insurers have pushed back, citing increased wildfire risks, inflation, and other rising costs
