State Farm expects to spend more than seven billion dollars on insurance payouts for January’s fires in Los Angeles County. The company says it has money to pay for the wildfire claims, but is worried about its future finances.
Last month, California Insurance Commissioner Ricardo Lara tentatively approved the request for an “emergency rate increase,” but only if the company could justify the increases to a judge.
Today, an administrative law judge heard from state regulators, consumer advocates, and State Farm representatives.
State Farm claims that without a rate increase, the hundreds of thousands of homeowners they insure could be negatively impacted, even losing their policies.
The consumer advocate group Consumer Watchdog is arguing that the company has not provided the necessary data to support the proposed rate increases. They think State Farm should ask its parent company, State Farm Mutual Auto Insurance, for backup cash, rather than its customers.
The hearing is being live streamed on YouTube, and could last up to three days.
