“Commissioner Lara has a responsibility not just to consider State Farm’s financial arguments but to protect Californians from unjustifiable financial burdens,” argued one consumer advocate. “We’re calling on the Commissioner to reject this latest aggressive request outright.”
State Farm General’s financial context paints a complex picture. Following devastating fires earlier this year in Pacific Palisades, Altadena, and elsewhere in Los Angeles County, the insurer reported having already paid $2.5 billion in claims, expecting that figure to reach $7.6 billion eventually. However, after reinsurance reimbursements, State Farm’s net losses are projected at around $600 million—a significant, yet arguably manageable figure for a corporate titan of its size.
Janet Ruiz, spokesperson for the Insurance Information Institute, while recently speaking to the Los Angeles Times, acknowledged rising industry-wide costs without commenting specifically on State Farm’s rate request. Ruiz identified escalating medical expenses, intensified severity of auto accidents post-COVID-19, and a rise in libel and slander suits fueled by social media as notable factors driving up umbrella policy costs.
