California Approves 17% State Farm Home Insurance Hike After Wildfires

California has approved a 17% emergency rate increase for State Farm's homeowners insurance policies following devastating wildfires in Los Angeles that destroyed over 16,000 buildings. The increase, lower than State Farm's original nearly 22% request, aims to stabilize the insurer's financial condition amid what the California Insurance Commissioner described as a "statewide insurance crisis." State Farm also secured a $400 million liquidity infusion from its parent company, which it will repay with interest, emphasizing that customers outside California should not bear wildfire-related risks. Despite backlash from fire survivors and consumer groups concerned about fairness and delayed claims payments, the commissioner stressed the need to balance protecting consumers and the insurer's solvency. State Farm committed to pausing non-renewals of certain residential policies throughout 2025 and highlighted its ongoing claims payments exceeding $3.5 billion. The move follows a downgrade of State Farm General's financial strength rating by S&P Global, which cited regulatory challenges and declining capital.