California Insurance Commissioner Ricardo Lara has agreed to a 22% average increase in homeowners insurance premiums for State Farm, contingent on the company meeting specific conditions. These include pausing any policy cancellations until the end of 2023 and securing a financial boost from its parent company. Lara emphasized the need for a transparent public hearing to scrutinize State Farm’s financial justifications for the rate increase, citing concerns from other states about large insurers not providing adequate data to support rate hikes.
State Farm must prove its need for the interim rate increases at a hearing April 8, where it must present updated and more detailed data.
Lara said he had to make an unprecedented decision in the short term, expecting State Farm to meet their responsibilities and not shift the burden onto customers.
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