State Farm, California’s largest insurer, is threatening to leave the state unless its Department of Insurance allows the company to raise home insurance rates for millions of residents.

Competitors Allstate and Farmers Direct have made similar moves in recent months by limiting coverage in California or leaving the state entirely due to the government’s insurance rate caps.

State Farm and the others claim that climate change is causing more disasters that require rate hikes of 50 percent or more. Many Californians no longer have home insurance coverage at all because insurers are fleeing the state in protest and there are no alternatives.

State Farm General has issued an ultimatum for all of California. The company wants to hike homeowner rates by 30 percent, condominium rates by 36 percent, and renter rates by a whopping 52 percent – and unless this is allowed, State Farm will leave the Golden State.

“This has the potential to affect millions of California consumers and the integrity of our residential property insurance market,” commented insurance commissioner Ricardo Lara, who says he is determined to “get to the bottom” of State Farm’s financial situation.

“State Farm General’s latest rate filings raise serious questions about its financial condition,” Lara added about the number-one insurance firm in the United States.

(Related: Major insurance companies are adding exclusions to policy coverage for riots, insurrection, war.)

Is State Farm struggling financially to survive?

The next step is to hold a rate hearing to allow Lara’s commission to hear from members of the public about the proposed rate changes. After that, the commission will make a decision that could take months to finalize.

Right now, the average amount of time it takes for the commission to approve or deny requests is 180 days. Some cases are taking even longer than that due to the number of large fires California has seen in recent years.

The Department of Insurance in California has already approved two rate hike increase requests from State Farm, which resulted in some state residents seeing massive policy increases. The first hike was 6.9 percent at the start of the year followed by another 20 percent hike in March.

Now, State Farm is requesting a third rate hike even though the company is supposedly worth around $143.2 billion as of 2021.

“At the time, the firm was generating some $87.6 billion in yearly revenue, and this past February, it issued a statement saying its net income for the previous year was an impressive $1.2 billion,” reported the UK’s Daily Mail Online.

“That was up more than 100 percent from the year before, when the Illinois based insurance provider raked in $588 million in income. Still, such a move usually signals an insurance carrier is struggling.”

In one of its requests, State Farm claimed that the purpose of its request is to restore its financial condition, providing the following statement:

“If the variance is denied, further deterioration of surplus is anticipated.”

State Farm further stated that it is currently “working toward its long-term sustainability in California,” this suggesting that the company is facing financial problems.

Back in March, State Farm dropped 72,000 of its California customers, this just one week after being granted permission to jack up policy rates in the state by 20 percent.

Farmers Direct Insurance fled California in 2023, which followed Allstate’s departure in 2022. Should California roll out new rules to help these carriers mitigate their risks, some could end up returning.

Once the economy really starts to freefall, insurance companies won’t want to cover anyone anywhere. Find out more at Collapse.news.

Sources for this article include:

• DailyMail.co.uk
• NaturalNews.com

As we reported last week, State Farm ceased selling new property insurance to California residents and businesses, citing climate change as a primary concern that would cause increased natural disasters. Allstate technically beat them to the punch by ending the practice last year, but they didn’t make it official until Friday.

According to CBS News:

Allstate quietly stopped issuing new policies in California months ago, but didn’t announce the move until Friday. Allstate was the fourth-largest insurer in California, according to the most recent 2021 state data. It earned $4.3 billion in premiums that year and incurred $2.6 billion in losses.

“We paused new homeowners, condo and commercial insurance policies in California last year so we can continue to protect current customers,” Allstate told CBS News in a statement Friday. “The cost to insure new home customers in California is far higher than the price they would pay for policies due to wildfires, higher costs for repairing homes, and higher reinsurance premiums.”

In 2021, California experienced at least 7,396 wildfires, which burned nearly 2.6 million acres of land, according to the California Department of Forestry and Fire Protection. The state had an additional 7,490 wildfires that burned 362,455 acres last year.

There are two problems with the natural disaster narrative. The biggest one is the obvious question of value. With higher risk comes higher premiums paid to insurance companies. Rather than shutting down business in the most populace state in the nation, they could mitigate risks by offering higher premiums. Fewer homeowners would buy it, but certainly some would.

The other challenge with their narrative is that the wildfire frequency has not increased. In fact, last year’s total burned acreage was below the average over the last four decades.

Are insurance companies blaming wildfires for bailing on California so they don’t have to call out other challenges like rampant crime, a dying economy, and woke policies, or do they know something we don’t know?

But as one might expect, the primary culprit cited by most corporate media sources I’ve read point to one major issue: climate change. Why? Because climate change is supposedly the root cause of literally every single possible negative event that has happened, is happening, or will happen… at least in the minds of the indoctrinated cultists.

Below is an article with all the details. As a quick note, I will avoid whenever possible linking to corporate media news sources. While they have the resources to cover national and world news, linking to their articles aids in giving them credibility that they do not deserve. Instead, I will be generating generic reporting that states the facts whenever possible. Here’s the article generated from a corporate media source:

State Farm General Insurance Company has made an announcement stating that it will no longer accept new applications for business and personal lines of property and casualty insurance. The decision comes as a result of significant increases in construction costs surpassing inflation, a rising exposure to catastrophic events, and a challenging reinsurance market, as explained in the company’s press release on Friday.

It is important to note that existing policyholders of home insurance will not be affected by this change, and new applications for personal auto insurance will still be accepted, according to the Wall Street Journal.

State Farm, which is one of California’s largest insurers, holds the position of the nation’s largest home insurer in terms of premium volume, as reported by the same source.

In its statement, State Farm acknowledges the efforts made by Governor Newsom’s administration, legislators, and California’s Department of Insurance in mitigating wildfire losses. The company expresses its commitment to collaborating with the CDI (California Department of Insurance) to help enhance market capacity.

The decision to halt new applications is primarily aimed at improving the financial strength of the Fortune 500 insurance giant.

Michael Soller, the deputy insurance commissioner for Northern California, cited climate change as one of the factors influencing State Farm’s choice. He emphasizes that the reasons behind the decision, such as climate change, escalating reinsurance costs affecting the entire insurance industry, and global inflation, are beyond their control. Soller underlines the significant wildfire risk in California as a fundamental contributor to the state’s insurance challenges.

Soller highlights various wildfire loss mitigation efforts undertaken by the governor, lawmakers, and insurance regulators, including the provision of community fire-prevention grants and the establishment of fire breaks. Additionally, he reveals that California has initiated an insurance discount program that takes into account consumers’ endeavors to mitigate wildfire risks.

California faces some of the highest housing costs in the nation, which have exacerbated the state’s homelessness crisis, according to Fox Business. KUSI reports that over the past five years, the state has allocated $20 billion toward addressing this issue. However, despite substantial taxpayer investments, the problem continues to worsen.

State Senate Minority Leader Brian Jones (R) suggests that a solution exists and points to Texas as an example. During his visit to Houston, he observed a lack of large tent encampments and a minimal number of panhandlers, unlike in California. Jones highlights Texas’s enforcement of laws related to drug crimes, petty theft, and sexual assault, as well as their prohibition of tent encampments. He emphasizes the need to address the challenge of homelessness in a compassionate manner while acknowledging the importance of maintaining proper conditions on the streets.

Overall, State Farm’s decision to cease accepting new applications for certain insurance lines reflects its efforts to address the financial challenges posed by rising construction costs, increased catastrophe exposure, and a difficult reinsurance market. The company will continue to support existing policyholders while working with regulatory bodies to strengthen the insurance market. The impact of climate change and California’s wildfire risks are significant factors influencing the insurance landscape, and the state continues to grapple with high housing costs and a growing homelessness crisis.