As other insurers retreated from California's wildfire-prone areas, State Farm expanded its market share by insuring high-value homes, achieving substantial growth in premiums. By 2022, it held a 20% market share with a notable 70% increase in premiums over five years. However, the company has faced financial strain, requiring significant rate increases to keep up with claim costs post-wildfires. The recent disastrous fire claims have driven State Farm to request emergency premium hikes while competing with the limited options left for homeowners searching for coverage.
Even as other insurers pulled back from wildfire-prone areas of California, State Farm gobbled up market share by insuring high-value homes, generating substantial commissions.
As of 2022, the company held a 20% market share in California, experiencing 70% growth in premiums over five years despite potential underwriting risks.
State Farm's financial outlook has turned dire, with over $1 billion already paid in claims from recent fires, prompting requests for significant premium increases.
The luxury homes damaged have left Southern California homeowners scrambling for coverage, many turning to the state's California FAIR Plan as a last resort.
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