After State Farm said it would stop selling new home insurance policies in California, Insurance Commissioner Ricardo Lara responded that the state will explore new rules allowing insurance companies to consider climate change when setting their rates. But companies will only get to do this if they agree to write more policies for homeowners who live in areas with the most risk, including communities threatened by wildfires.
While a multi-year surge of non-renewals affected roughly 235,000 households by 2021, there are more than 13.3 million households in California. Lara's rule change could mean higher rates for all homeowners, who are already seeing dramatic cost increases, and could result in more expensive homeowner and renter insurance bills. Eight insurance companies have asked California for rate increases of at least 20% or higher, according to the state Department of Insurance. State Farm's request was approved in December.
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