California has approved a temporary 17% rate increase for State Farm’s homeowners’ insurance policies following catastrophic fires. The state announced that the insurer can charge the higher rate until a hearing later this year. Last year, State Farm already received a 20% rate hike, which was criticized by consumer watchdog groups and affected homeowners. In February, after fires destroyed over 16,000 homes in Los Angeles neighborhoods, State Farm requested an emergency increase of nearly 22%, citing a “dire situation.” The company insures approximately 1 million homes in California, or about one in five. Consumer advocates argue that such increases add further burden to homeowners who have faced delays or insufficient claims payouts post-disaster. State Insurance Commissioner Ricardo Lara described the decision as a difficult compromise amid a statewide insurance crisis.
— new from The New York Times
