California regulators have provisionally approved State Farm's request to raise homeowners' insurance rates by an average of 22%. The decision follows damaging wildfires in Los Angeles, leading to an estimated $7.6 billion in losses. Insurance Commissioner Ricardo Lara stated the hikes are temporary and subject to data justification in an upcoming public hearing. The approval also includes 15% increases for renters and 33% for rental owners. Lara emphasized the importance of State Farm fulfilling its obligations to customers amidst the rising costs.
"State Farm claims it is committed to its California customers and aims to restore financial stability," Lara said in a statement. "I expect both State Farm and its parent company to meet their responsibilities and not shift the burden entirely onto their customers."
The company said it can cover the staggering damage in Southern California but must raise rates to shore up its shaky financial health.
The state's largest insurer also won approval to increase premiums by 15% for renters and condo owners and 33% for rental owners.
Lara said the 'emergency interim' rate hikes can only go through if the company can provide data to justify the increases in a public hearing scheduled for April 8.
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