(Natural News)—The insurance industry is waging war on California’s state government over home insurance rates.
State Farm, California’s largest insurer, is threatening to leave the state unless its Department of Insurance allows the company to raise home insurance rates for millions of residents.
Competitors Allstate and Farmers Direct have made similar moves in recent months by limiting coverage in California or leaving the state entirely due to the government’s insurance rate caps.
State Farm and the others claim that climate change is causing more disasters that require rate hikes of 50 percent or more. Many Californians no longer have home insurance coverage at all because insurers are fleeing the state in protest and there are no alternatives.
State Farm General has issued an ultimatum for all of California. The company wants to hike homeowner rates by 30 percent, condominium rates by 36 percent, and renter rates by a whopping 52 percent – and unless this is allowed, State Farm will leave the Golden State.
“This has the potential to affect millions of California consumers and the integrity of our residential property insurance market,” commented insurance commissioner Ricardo Lara, who says he is determined to “get to the bottom” of State Farm’s financial situation.
“State Farm General’s latest rate filings raise serious questions about its financial condition,” Lara added about the number-one insurance firm in the United States.
(Related: Major insurance companies are adding exclusions to policy coverage for riots, insurrection, war.)
Is State Farm struggling financially to survive?
The next step is to hold a rate hearing to allow Lara’s commission to hear from members of the public about the proposed rate changes. After that, the commission will make a decision that could take months to finalize.
Right now, the average amount of time it takes for the commission to approve or deny requests is 180 days. Some cases are taking even longer than that due to the number of large fires California has seen in recent years.
The Department of Insurance in California has already approved two rate hike increase requests from State Farm, which resulted in some state residents seeing massive policy increases. The first hike was 6.9 percent at the start of the year followed by another 20 percent hike in March.
Now, State Farm is requesting a third rate hike even though the company is supposedly worth around $143.2 billion as of 2021.
“At the time, the firm was generating some $87.6 billion in yearly revenue, and this past February, it issued a statement saying its net income for the previous year was an impressive $1.2 billion,” reported the UK’s Daily Mail Online.
“That was up more than 100 percent from the year before, when the Illinois based insurance provider raked in $588 million in income. Still, such a move usually signals an insurance carrier is struggling.”
In one of its requests, State Farm claimed that the purpose of its request is to restore its financial condition, providing the following statement:
“If the variance is denied, further deterioration of surplus is anticipated.”
State Farm further stated that it is currently “working toward its long-term sustainability in California,” this suggesting that the company is facing financial problems.
Back in March, State Farm dropped 72,000 of its California customers, this just one week after being granted permission to jack up policy rates in the state by 20 percent.
Don’t wait for a stock market crash, dedollarization, or CBDCs before securing your retirement with physical precious metals. Genesis Gold Group can help.
Farmers Direct Insurance fled California in 2023, which followed Allstate’s departure in 2022. Should California roll out new rules to help these carriers mitigate their risks, some could end up returning.
Once the economy really starts to freefall, insurance companies won’t want to cover anyone anywhere. Find out more at Collapse.news.
Sources for this article include:
What Would You Do If Pharmacies Couldn’t Provide You With Crucial Medications or Antibiotics?
The medication supply chain from China and India is more fragile than ever since Covid. The US is not equipped to handle our pharmaceutical needs. We’ve already seen shortages with antibiotics and other medications in recent months and pharmaceutical challenges are becoming more frequent today.
Our partners at Jase Medical offer a simple solution for Americans to be prepared in case things go south. Their “Jase Case” gives Americans emergency antibiotics they can store away while their “Jase Daily” offers a wide array of prescription drugs to treat the ailments most common to Americans.
They do this through a process that embraces medical freedom. Their secure online form allows board-certified physicians to prescribe the needed drugs. They are then delivered directly to the customer from their pharmacy network. The physicians are available to answer treatment related questions.
Instead of making idle threats, State Farm should consider not writing any new business and reduce or eliminate renewals in CA. Insurance is becoming a perk for the wealthy as the peasant population grows as planned by CA politicians.
Do not let state farm raise rates because all they are trying to do is feed their stockholders, and quite frankly they should be the first to take a hit. Can you imagine the chaos that will ensue when everyone stops paying their car and home insurance, because food and gas are more important than insurance? We are not take getting screwed sitting down because of Bidenomics and his destruction of America.
You people must realize that inflation affects every aspect of American life and it will soon become an ever escalating downward spiral into third world status as America falls apart !!!
Is this statement you made true? “Many Californians no longer have home insurance coverage at all because insurers are fleeing the state in protest and there are no alternatives” If so, where is your research, statistics or quote with citation on how many people in California have no home insurance?
The truth is, that if your carrier is non-renewing your policy, that homeowners are buying insurance through the Fair Plan for Fire Coverage and you can purchase a policy to cover liability and more from another carrier – so you end up having 2 policies. Homeowners with home loans can also allow their lenders to place insurance for them, usually at higher rates.
Also, you give no evidence that State Farm Insurance said they would leave the State. Where is the quote? Where is the supporting evidence?
State Farm did file for rate increases, but that does not mean that they are planning on leaving the State.
Shame on you for hyping up an article without being able to back up your claims.
Eric Opdahl
State Farm Agent California, 22 years
In this case, the phrase “climate change is causing more disasters” from the article is a euphemism of lawlessness, excessive costly needless regulations, state not maintaining public lands, etc. Since insurance companies do not print money, nor do they have a “money tree”, when the cost of business goes up, they are forced to either raise their prices of close shop.
Given the current trend, insurance companies will depart forced to depart the state, and in the end insurance will become a monopoly, one insurance insurance provider within the state, government insurance. Like dealing with DMV for your drivers’ license and vehicle registration? How much more “fun” will be to also deal with them for your insurance?
State Farm has not threatened to leave the State. The author makes it sound like they did, but there is no direct quote or source for that information.
State Farm did request increases, but there has been no threat to leave California. Here are the other companies that have asked for increases recently:
Updated Competitor Actions
The California Auto & Home Competitor Actions documents have been updated with filings through the end of May.
• Auto:
o GEICO General pending filing for +6.9% with requested effective date of 11/1/2024
o Allstate Northbrook pending filing for +6.9% effective On Approval
o Farmers pending filing for +6.9% with requested effective date of 9/26/2024
o Auto Club pending filing for +6.9% with requested effective date of 11/1/2024
• Home:
o Travelers approved for +12.6% effective 6/24/2024.
o CSAA approved for +6.9% effective 8/1/2024.
o Farmers approved for +8.0% for their New Business program with 8/19/2024 effective date
o Safeco pending filing added: +13.7% increase with 12/1/2024 effective date
Mercury pending filing added: +12.1% increase with 5/10/2025 effective date
Shame on the author for twisting things and not providing sources.
And Shame on the moderator/author for not posting my previous comment. Guess it doesn’t fit the narrative and challenges your assertions. All so you can get more hits and sell more ads.