State Farm General, California’s largest insurer, has filed a 39% rate hike for its California Personal Liability Umbrella program, which provides additional coverage for various situations like serious auto accidents and damage to another person’s property.
The California Department of Insurance would need to approve the rate hike, which would go into effect on Aug. 1, should it be approved.
The company said it is asking for the increase because “personal liability costs have risen dramatically across the industry due to more accidents, escalating medical bills, and larger legal settlements as well as a higher number of claims,” the Los Angeles Times reported.
The new rate hike comes after the company requested an emergency 22% rate hike due to the company’s “dire” financial situation after the deadly and destructive Los Angeles County wildfires.
California Insurance Commissioner Ricardo Lara has provisionally accepted the rate hike. A full approval would come “only if the company can justify it with data” in a public hearing scheduled for April 8.
“Commissioner Lara’s actions follow an unprecedented meeting at the Department of Insurance’s Oakland office on February 26, 2025,” the insurance commissioner’s office stated. “During this meeting, State Farm informed the Commissioner that while it can cover claims from the Southern California wildfires, the disaster has worsened its financial condition.”
In addition to provisionally accepting the company’s request, Lara called on State Farm to halt non-renewals and to ask for a $500 million capital infusion from its parent company to help stabilize finances.
