California Insurance Commissioner Ricardo Lara proposed a 22% average hike in home insurance premiums for State Farm, contingent upon conditions including a halt on policy cancellations. He emphasized the need for transparency and accountability from State Farm and its parent company regarding financial assistance. This decision stems from increased wildfire risks that have led to substantial claims and financial instability for the insurer, which serves nearly 3 million property owners in California. A public hearing is scheduled to evaluate the necessity for these interim rate increases and associated claims.
Lara has been trying to reform the state's insurance market as providers like State Farm have canceled policies or paused writing new ones, saying they have been unable to charge premiums that match increased wildfire risks.
I expect both State Farm and its parent company to meet their responsibilities and not shift the burden entirely onto their customers, Lara wrote.
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