State Farm to pursue raising premiums for California homeowners

MONTEREY COUNTY, Calif. (KION-TV) -- Growing concern about wildfires and insurance premiums rising throughout the state of California.

State Farm has announced a potential second price hike in just weeks. State Farm looks to increase homeowner insurance policies just weeks after approval of a 17 percent hike. The insurance company is claiming costs after the Southern California fires, prompting the change. 

“Here in Monterey, we do have wildfire risk. We do have areas of very high, high, and moderate fire hazard severity zones that were identified by the state fire marshal's office," Monterey Fire Division Chief Justin Cooper said.

Cooper also reiterates that it is important to be prepared after the damage shown in the Palisades fire. 

“It is very being proactive out in the communities as part of fire prevention. We work hand in hand with our forestry division here in Monterey, also with our adjoining cities, to help mitigate some of these hazards.” 

State Farm announced the additional increase would not surpass the 30 percent increase requested initially in June of last year. Still, homeowners and renters will see a significant change to their bills come June first. In a statement, State Farm said, “The overall request of 30 percent would not be on top of the 17 percent interim rate change. State Farm General is still pursuing the full rate request. A hearing on the full rate request is expected to be held this year.”

On Tuesday, the city of Monterey adopted new hazard maps. The chief said insurance premiums should not go up due to these risk models.

“They're not supposed to be used by insurance companies for risk models,” Cooper said. “They use their own set of criteria to determine risk, and then they manage that risk, obviously, with insurance premiums and so forth for homeowners.”

State Farm added that they've paid more than $3.5 billion, handled more than 12,692 claims since May 12. They add that they need these emergency rate increases to continue to serve California residents.

These additional increases will need to be debated through the California Department of Insurance pending approval. The next hearing is set for October, where State Farm is expected to try to justify the rate hikes.