The state farm, the largest insurance company of house owners in California, asked the regulatory bodies of state insurance on Monday to urgently approve the average rate of 22 percent, which is a disturbing sign for the fragile insurance market in the state susceptible to disaster.
In recent years, more Californians have tried to provide affordable homeowners’ insurance because companies have increased their rates or pulled out of the market because fires and other disasters have become more destructive. Last month, the Los Angeles, which destroyed 12,000 houses, increased these concerns because people considered whether they were rebuilt.
State Farm has received more than 8,700 claims from Los Angeles fires and, according to the company, paid more than $ 1 billion to customers. The insurer expects to pay significantly more and the fires will be the most expensive in the history of the state farm, the company said.
The General of the State Farm, which provides more than a million homeowners in California, is operated separately from associated companies that provide car and life coverage. The Company asked the State Regulatory Authorities to approve the increase in rates for restoration from May.
“Insurance will cost more for customers in California because the risk is greater in California,” the company said in Monday’s statement. “We have to compare the price to risk reasonably.” This is the basis of how insurance works. ”
The Office of the Commissioner of Insurance stated that it would examine the application for an increase in the state rate. The company has already had three submission of the waiting rate with the Ministry.
“The General State Farm rates raise serious questions about its financial situation,” said Gabriel Sanchez, a spokesman for the insurance Commissioner. “To protect millions of consumers in California and the integrity of our residential real estate market, the Ministry will respond with urgency and transparency.”
The state farm was constantly trying to reduce its financial exhibition in California, as disasters became more expensive and more frequent in the state. Last year, State Farm announced that it will not renew 30,000 home owners’ policies. The company announced this in the previous year would not write Any new policies in California.
Increase in rates and political non -anniwals in California have shifted a growing population to a special plan created by state lawmakers in 1968 to cover people who cannot obtain standard household insurance for various reasons. Number of houses in the program, California righteous planIt doubled from 2020 to 2024.
