California Department of Insurance recently announced that State Farm will be increasing its average by 20% next year.
Insurance Commissioner Ricardo Lara has also proposed policy actions to address problems regarding the said increase. (Photo: San Diego Union-Tribune)
California Department Of Insurance’s Approved Proposals
State Farm, the largest insurer of homeowner policies in California, will increase its average rate by 20% next year, according to approved proposals from the California Department of Insurance.
This announcement from the California Department of Insurance comes at a challenging time for the state’s insurance market, as major companies have paused or restricted new business, leaving residents with fewer options and higher prices.
In line with the California Department of Insurance announcement, State Farm blamed increased costs and risks, including higher construction costs and growing risks from catastrophic events like wildfires.
Insurance Commissioner Ricardo Lara from the California Department of Insurance has proposed policy actions to address these issues, but details and regulations are still being finalized.
According to a published article by Yahoo, aside from the California Department of Insurance’s announcement, the president of the Personal Insurance Federation of California attributed the rate increase to the state’s current system, which he said tied the hands of insurance companies.
Better Compensation For Consumers
In a published article by The North Bay Business Journal, a new law in California, effective January 1, aims to provide better compensation for consumers who have been defrauded by businesses.
The law, known as Assembly Bill 1366, permits the state attorney general to seek repayment of ill-gotten gains from companies that violate unfair competition or false advertising laws.
The recovered money will be placed into a restitution fund in the state treasury, which will be used to fully reimburse the affected consumers.
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