Michael L. Tipsord Chairman, President and Chief Executive Officer | Official website
State Farm General Insurance Company has requested the California Department of Insurance to approve interim rate increases, including a 22% average for homeowners. The company has been serving customers in California for nearly a century and aims to continue its service despite recent challenges.
In response to the January 2025 wildfires, State Farm General has received over 8,700 claims and paid more than $1 billion to customers. These fires are expected to be among the costliest disasters in the company's history. The costs associated with these events have further depleted State Farm General's capital, which is crucial for covering future claims.
Last year, a rating agency downgraded State Farm General's financial strength due to its capital position. Further deterioration could lead to additional downgrades, affecting customers with mortgages who rely on State Farm insurance as collateral backing.
The company has emphasized that insurance costs will rise in California due to increased risk. Immediate approval of rate increases is seen as essential for aligning costs with risks and rebuilding capital. Over the past nine years, misalignment between price and risk has resulted in significant underwriting losses for State Farm General.
In May 2023, State Farm General ceased writing new policies and later non-renewed 30,000 homeowners policies representing high catastrophe risk. However, following recent wildfires, non-renewals in Los Angeles County were paused.
State Farm General remains committed to working with regulators and industry leaders to create a sustainable insurance environment in California that balances risk and rates while ensuring market stability.