The California Department of Insurance will hold a meeting Tuesday over a request by State Farm for a $900-million rate hike.
If granted, it could cost the typical policyholder an extra $600 per year on their homeowner's premium.
In a letter, the company said insurance will cost more for customers in California going forward because the risk is greater in California and added that the rate hike is essential to enable the company to rebuild its capital.
This comes weeks after Commissioner Ricardo Lara temporarily granted State Farm’s emergency 22% hike following the SoCal wildfires. According to a press release by Lara’s office, State Farm needs to justify its request with data during the public hearing.
Harvey Rosenfield with Consumer Watchdog told KNX News’ Jon Baird he believes that State Farm cannot justify the rate.
Want to get caught up on what's happening in SoCal every weekday afternoon? Click to follow The L.A. Local wherever you get podcasts
“That is going to hurt. I mean, that's going to hurt badly,” he said. “ Nobody in this state - especially with what's happening in our economy - nobody in the state can afford an extra load of premiums to cover their homes and their commercial property. It's just overwhelming.”
The hearing will be held at 10 a.m. and will be live-streamed on YouTube.
An official for the Department of Insurance said no decision will be made at the hearing Tuesday. The decision will come at a later date.
KNX News has reached out to State Farm for further comment.
Follow KNX News 97.1 FM
Twitter | Facebook | Instagram | TikTok