State Farm is looking to hike insurance rates for some customers in California again, this time planning an increase of over 50%, according to a report.
In a filing to the California Department of Insurance, the company's subsidiary State Farm General requested to increase its renters' policies by 52%. Additionally, it also requested hikes on homeowners' insurance policies by 30% and condo policies by 36%, as reported by Fox Business.
The recent filings come after State Farm was previously approved a 20% hike for homeowners' and condo owners' policies in December 2023.
What Led to the Recent Request
In a statement, State Farm said its subsidiary's request for a hike is part of its effort toward "long-term sustainability." It also points to "increased costs and risks" as one of the reasons for the request.
"We continue to look for ways to maintain competitive rates and help our customers manage their risk," a State Farm spokesperson said, as quoted by CNN. "Customers with questions are encouraged to speak with their local State Farm agent. The agent can review the customer's policy, including deductibles and coverages."
In response to the hike request, California Insurance Commissioner Ricardo Lara said the agency will launch an investigation into State Farm's financial situation, noting that the filing raises serious questions about the insurance provider's financial condition.
"Nothing changes today for State Farm policyholders as a result of these filings. We are going to lead with facts to make sure Californians are protected," Lara added.
State Farm's request comes months after it announced its decision to stop accepting new applications for property insurance and other policies in California due to "historic increases in construction costs and inflation."
Then, earlier this year, the company announced it would cut 72,000 insurance policies in California. That included 30,000 property insurance and 42,000 apartment policies.
"This decision was not made lightly and only after careful analysis of State Farm General's financial health, which continues to be impacted by inflation, catastrophe exposure, reinsurance costs, and the limitations of working within decades-old insurance regulations," the company said of the decision.
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