State Farm requests massive rate hikes amid financial woes
What concerns did the Department of Insurance express about State Farm's request?
The Department of Insurance expressed "serious questions" about State Farm's request for a rate hike and plans to investigate the company's financial situation using all of its investigatory tools. State Farm's loss ratio of nearly 90% in California last year raised concerns about the company's financial condition and the potential impact on millions of California consumers and the integrity of the residential property insurance market.
Why did State Farm stop issuing new homeowner policies last year?
State Farm stopped issuing new homeowner policies last year due to inflation, increased disaster risks, and a challenging reinsurance market. These factors have led to financial pressures on the company, prompting them to focus on improving their financial strength and sustainability in California.
What was State Farm's loss ratio in California last year?
State Farm's loss ratio in California last year was 89.61%, meaning it paid out $89.61 in claims for every $100 it received in premiums. This was higher than the overall market loss ratio in California, which stood at 68.25%.