State Farm recently requested its largest home insurance rate increase to date, a move that would worsen the insurance crisis in California but also signaled that the company may be in financial trouble.
State Farm General, the company’s California subsidiary, recently submitted a request to the California Department of Insurance to raise insurance rates for homeowners, condo owners and renters in the Golden State.
On average, State Farm General is hoping to raise rates 30% for homeowners, 36% for condo owners and 52% for renters, according to the San Francisco Chronicle.
“State Farm General’s latest rate filings raise serious questions about its financial condition,” Ricardo Lara, California’s insurance commissioner, told the Los Angeles Times in a statement. “This has the potential to affect millions of California consumers and the integrity of our residential property insurance market.”
Lara also told the Times that his department would use all of its “investigatory tools to get to the bottom of State Farm’s financial situation.”
KTLA couldn’t access the documents due to website maintenance.
“State Farm General Insurance Company (‘State Farm General’) is working toward its long-term sustainability in California. Rate changes are driven by increased costs and risk and are necessary for State Farm General to deliver on the promises the company makes every day to its customers,” Gina Morss-Fischer, a company spokesperson, said in a statement.
“We continue to look for ways to maintain competitive rates and help our customers manage their risk. Rate filings are not final until approved by the California Department of Insurance. Customers with questions are encouraged to speak with their local State Farm agent.”
The potential rate increases from State Farm comes after the company announced in March plans to non-renew 72,000 policies in California.
Last year, the company announced it would stop accepting new insurance applications for all business and personal property in California.
Since then, other companies like Allstate have announced similar moves.