California homeowners face soaring insurance costs as State Farm pushes for a total 30% increase in home insurance rates. The company already secured a 17% emergency hike, and now seeks an additional 11%, even while many wildfire victims say they haven’t received fair compensation.
State Farm’s 17% increase, effective in June 2025, was approved by Insurance Commissioner Ricardo Lara following recent destructive fires. The approval followed a monthslong review process labeled an emergency due to major losses. However, this was not the full amount State Farm initially sought. The company had filed for a 30% hike back in 2024, and now appears determined to reach that goal in two stages.
State Farm also intends to dramatically increase rates for condo owners and renters, by 36% and 52% respectively. These rate increases are scheduled to be reviewed in a full hearing in the fall of 2025, where State Farm must justify its financial position and rate structures.
Meanwhile, State Farm has drawn criticism for how it handled claims following the Eaton and Palisades Fires. Numerous policyholders have accused the insurer of offering inadequate compensation and delaying payments. Some have accused the company of “lowballing” estimates, a complaint not isolated to California. Similar reports have surfaced nationwide in the wake of other disasters.
Despite these issues, State Farm has made minor concessions. After pressure from President Donald Trump’s special envoy, Ric Grenell, the insurer agreed to increase personal property loss coverage from 50% to 65% without requiring itemized lists. While a step forward, this adjustment has not silenced critics who argue the company should meet its full obligations before raising rates further.
California’s insurance regulations previously restricted companies from pricing in future risks, prompting many insurers to pull back from the market. Now, the pendulum has swung in the opposite direction, allowing State Farm to push ahead with increases even as claims remain unresolved. The outcome of the upcoming rate hearing will determine whether these proposed hikes go into effect in 2026.
