California Insurance Commissioner Ricardo Lara granted State Farm’s request Tuesday for large rate increases despite the company’s failure to deal honestly with many victims of recent wildfires.
State Farm dropped many policyholders in the months leading up to the devastating fires in Los Angeles, and has dragged its feet in helping those homeowners who retained their policies, often “lowballing” estimates of repairs.
The company only eased a demand that homeowners provide full, itemized lists of lost possessions after meeting with President Donald Trump’s envoy, Ric Grenell. (The company will now provide 65% of the policy’s value before itemization, rather than 50%.) Victims of both the Eaton Fire and the Palisades Fire demanded that Lara insist that State Farm reform its business practices before granting a rate hike.
But on Tuesday, Lara — who had missed key hearings on the evidence for State Farm’s demand — relented.
The Los Angeles Times reported that an “administrative law judge endorsed a request by State Farm General to increase its homeowner rates by 17%, at least partially due to losses it suffered in the Jan. 7 fires in Los Angeles County.”
Lara’s approval followed shortly thereafter.
Sacramento-area NBC affiliate KCRA reported:
Lara at first raised questions about State Farm’s need for a rate hike and then held a hearing in March on the emergency rate request. He ultimately asked a judge to review the facts of the case.
The Insurance Department’s administrative hearing bureau then held a hearing before Judge Karl-Fredric Seligman issued the order that Lara adopted.
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He added that dealing with a statewide insurance crisis “requires tough decisions.”
California had been faulted for years for restricting insurance companies from raising rates to adjust for future wildfire risk. The result was that State Farm and other companies began canceling policies and leaving the state altogether.
Homeowners are frustrated that California is allowing State Farm to raise rates after the fact, as the state belatedly acknowledges that price restrictions could prevent insurers from operating at all.
In addition to the 17% rate hike for homeowners, State Farm will raise rates up to 38% for rental buildings. The company had originally requested a hike of 22% for homeowners, which Lara “provisionally” granted.
Lara has been faulted for allegedly being too close to the insurance industry. Under criticism from Rep. Rep. John Garamendi (D-CA), Lara said he was tired of being “white mansplained on how to do my job.”
Joel B. Pollak is Senior Editor-at-Large at Breitbart News and the host of Breitbart News Sunday on Sirius XM Patriot on Sunday evenings from 7 p.m. to 10 p.m. ET (4 p.m. to 7 p.m. PT). He is the author of Trump 2.0: The Most Dramatic ‘First 100 Days’ in Presidential History, available for Amazon Kindle. He is also the author of The Trumpian Virtues: The Lessons and Legacy of Donald Trump’s Presidency, now available on Audible. He is a winner of the 2018 Robert Novak Journalism Alumni Fellowship. Follow him on Twitter at @joelpollak.
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