State Farm seeks emergency CA rate hike after $7.6B LA wildfire loss

In California, a judge will soon decide if State Farm, the state's largest insurance company

can enact a 17 percent emergency rate hike. At a hearing in Oakland this week, State Farm made its

case, arguing the company is having to pay out $7.6 billion in claims in the wake of LA's wildfires

and these payouts are depleting its reserves. A consumer watchdog group is arguing against State

Farm's rate increase, saying policyholders shouldn't be on the hook for the state's recent

devastating natural disaster, saying in court the insurance agency should provide proof they need

rate increases, suggesting they haven't sufficiently done that. The group's founder said the way it's

been engineered by State Farm, it's a fast track. They want the commissioner to approve their rate

increase now and then figure it out later whether it was justified or not. But state officials seem

receptive to State Farm's request as the home insurance market is dealing with something of a

crisis in California. State Farm said during the hearing it's been losing money in the state over

the last 10 years Other insurance agencies are experiencing the same thing Some like Allstate and farmers are no longer offering coverage or limiting it in a state they have deemed a liability State Farm emergency rate hike would impact all State Farm policyholders in California

The agency says it's needed in order to refill its cash reserve

Otherwise, State Farm said at the hearing it won't be able to pay claims if another disaster strikes

At a hearing last month, the state gave provisional approval of a rate hike

something the judge will have final say over. Lawyers for the California Department of Insurance

were clear on the state's position at this week's hearing in support of State Farm's ask

comparing California's insurance market to a sinking ship, saying, quote, normal rules don't apply. We're on the Titanic and we see the iceberg. Now is not the time to

argue about where to put the deck chairs. There is still time, Your Honor, to turn this ship around

If we don't, over three million Californians are going in the water and there are not enough lifeboats

It's a multi-day hearing over the proposed rate increase. Arguments are expected to wrap Thursday

The judge will issue his ruling within 10 days