State Farm customers in fire-ravaged California are staring down an approximately 22% homeowners insurance premium increase after the company filed for a rate hike, citing financial distress.
It's a troublesome, if not unexpected, next chapter in a tragedy that has been unfolding since the flames started spreading from Pacific Palisades on Jan. 7. But some industry watchdogs are questioning if the steep hike is warranted, according to CBS News.
What's happening?
The weeks-long, community-razing blazes have killed at least 29 people and destroyed thousands of structures at an estimated cost of $250 billion, per Accuweather data cited by the Los Angeles Times.
State Farm, a California insurer for a century, said it has received 8,700 claims, with more than $1 billion paid out as of Feb. 1. It's a commitment the company reported in a fact sheet explaining why it warrants higher premiums.
State Farm has been citing financial woes since at least last year. The report specifically noted a financial strength rating downgrade from an unnamed agency. Credit rating firm AM Best downgraded State Farm's financial strength rating to "fair" from "excellent" in March 2024.
For their part, California insurance officials said the hike request has raised "serious questions" about State Farm's actual financial condition, according to CBS.
Stay hydrated and refreshed this holiday season — without any sugar or harmful additives Nuun’s zero-sugar hydration tablets are a perfect, guilt-free way to enhance your water throughout the day. You’ll get five essential electrolytes for everyday hydration — with zero grams of sugar. Plus, Nuun tablets are certified vegan and gluten-free, and they’re the perfect size to keep in your car, purse, or anywhere you'll want a healthy, restorative drink. Learn more → |
"To protect millions of California consumers and the integrity of our residential property insurance market, the department will respond with urgency and transparency to recommend a course of action for Commissioner [Ricardo] Lara," the state's Department of Insurance said, per the CBS report.
Why is State Farm's request important?
State Farm's fact sheet makes it pretty clear: "Insurance will cost more for customers in California going forward because the risk is greater."
It's a troubling trend for residents in storm-prone regions around the country, particularly coastal areas. Insurers, including State Farm, have been limiting coverage or pulling out of certain high-risk markets.
|
Do you think home heating costs are higher than they should be? Click your choice to see results and speak your mind. |
Definitely 👍 At issue is an increased risk for severe weather, made worse by our overheating planet, and all fueled by burning nonrenewables. The World Weather Attribution, a group of climate scientists that monitors extreme storms, reported that air pollution-related warming has spiked the likelihood for conditions that increase the chances of devastating wildfires and potential disaster intensity.
There's a reason dermatologists personally use this daily moisturizing sunscreen more than any other brand Dermatologists see and understand skin at a much deeper level than the rest of us, and they know that the perfect SPF both protects and corrects your skin. That's why they trust, recommend, and personally use EltaMD more than any other brand. EltaMD's clinically tested formulas are designed with dermatologists to meet the needs of any skin type or condition. They're also designed for consistent daily wear to build long-term resilience with a moisturizing, lightweight, non-comedogenic texture — plus hyaluronic acid to help reduce the appearance of fine lines and wrinkles. Learn more → |
"Human-induced climate change is increasing wildfires in many regions of the world, as hot, dry, and windy weather conditions increase the risk of fires both starting and spreading," the experts said in their findings.
What's being done to help?
Diligent government regulators should thoroughly vet rate increase requests to make sure the need is valid, and that companies are being honest.
Anyone considering a move can stay educated on regional weather trends to better understand how our changing environment is impacting safety and living expenses. Innovators are developing fire-resistant building materials and even homes that rise above flood waters to help mitigate risks.
Using cleaner rides and other tech, and voting for candidates who are in tune with climate issues, are other ways to support planet-friendly businesses and policy.
Join our free newsletter for good news and useful tips, and don't miss this cool list of easy ways to help yourself while helping the planet.
Cool Picks
