ALPINE, Calif. (KGTV) — State Farm customers across California are preparing for a drastic rate hike that takes effect on June 1.
California’s largest insurance company said the rate increase was necessary as it needs funds following the devastating wildfires in Los Angeles.
Earlier this month, the state Insurance Commissioner approved State Farm's request for a rate increase after the company applied for an emergency rate hike — citing severe financial problems after $7 billion worth of claims stemming from the LA-area fires.
Starting June 1, customer rates could go up by about 17% the next time they renew.
State Farm is spreading out its losses over its customers, and it’s not just homeowners.
Premiums for renters could increase by 15% and premiums landlords pay for rental properties could go up by 38%.
ABC 10News has previously reported that residents in fire-prone places, like many parts of San Diego County, have already been paying high insurance premiums. And this one will be the second rate increase since 2023.
One Alpine resident who grew up in the East County told ABC 10News his insurance has gone from $500 to $1,400 per month in the past few years.
This next rate hike is making him consider leaving the state for somewhere more affordable like Arizona.
“After 28 years it might be time to just pack stuff up and get out of here,” said Billy, who lives in Alpine. “San Diego is a place I’d always love to call home. But it’s one of those places that’s becoming so hard to afford to call home, it’s kind of pushing everyone away.”
The rate hike takes effect for any policy renewed Sunday or later.
In a statement, State Farm also says it’s going to pause its non-renewals through the end of the year. That means fewer people will lose coverage.
