Topline:
State Farm General, California’s largest fire insurance provider with nearly three million policies, is seeking interim rate hikes in the wake of the L.A. wildfires.
Why now: State Farm sent a letter to Ricardo Lara, California Insurance Commissioner, on Monday asking the department to immediately approve interim rate hikes “to help avert a dire situation for our customers and the insurance market in the state of California.”
Why it matters: State Farm has the most California customers out of any other insurer, according to the company. It expects the fires to collectively be the costliest in its history.
The details: If approved as requested, the interim rate hikes would be 22% for homeowners, 38% for rental properties, as well as 15% for tenants and condo unit owners. It could go into effect in May.
The backstory: The company said in the letter that it has paid more than $1 billion to customers and received nearly 9,000 claims as of the beginning of February — and it expects to pay “significantly more.” It also stopped writing any new policies in California last spring.
What’s next: California customers can expect to pay more for their insurance from here on out because “the risk is greater,” State Farm said in a statement.
Go deeper: …read more about insurance issues in California.
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