CALIFORNIA – State Farm customers in California could receive refunds after a settlement over emergency wildfire-related rate hikes, state officials announced March 6.
The increases followed the 2025 Eaton and Palisades wildfires in Los Angeles. State Farm sought emergency rate hikes after the fires.
The company is the largest home insurer in California.
The state has faced a growing insurance crisis in recent years as major insurers limit coverage in wildfire-prone areas.
The three-party agreement is now pending formal review by an administrative law judge. The review is part of an ongoing rate hearing examining State Farm’s request.
Officials say the settlement is intended to provide financial relief to many policyholders. It is also meant to ensure continued coverage as California’s insurance market stabilizes.
California Department of Insurance (CDI) spokesperson Michael Soller commented on the rate hearing process. He said it reflects the strength of California’s transparent and long-standing consumer protections.
“Our department’s role is to carefully review the data and hold insurance companies accountable so Californians are not paying more than is justified,” Soller said.
Settlement details
The settlement agreement between the CDI, State Farm, and Consumer Watchdog confirms the commissioner’s prior order approving State Farm’s emergency interim rate increase. It includes several modifications.
Homeowners policies will keep the current 17% interim rate increase, meaning there will be no additional impact beyond the already approved rate.
Rental dwelling policies will see the previously approved 38% interim rate reduced to 32.8%, resulting in refunds for affected policyholders along with 10% interest retroactive to June 1, 2025.
Condominium policies will have rates reduced from 15% to about 5.8%, with policyholders receiving refunds and 10% interest back to June 1, 2025.
Renters insurance policies will see a slight increase to about 15.65%, up from the currently approved 15% interim rate.
Agreement still under review
The settlement agreement will now be reviewed by an administrative law judge, with a ruling expected around April 7.
