State Farm may temporarily charge an additional 17 percent for house insurance policies in California, after the State gave permission to the company, following the catastrophic fires. The insurer will be allowed to collect the high rate at least until an audience at the end of this year, the State announced on Tuesday.
The insurance giant has already received an increase in the 20 percent rate last year, a extent to which a consumer surveillance group, as well as the owners of housing fighting to receive the payment after their houses were destroyed in January in the fires of Los Angeles, criticized.
State Farm requested the increase in the emergency rate in February, the month after the fires crossed the neighborhoods of Pacific Palisades and Altadena de Los Angeles, dragging around 16,000 homes and structures. The company, which ensures one in five homes in California or approximately 1 million housing customers, had requested even more: an increase in the rate of almost 22 percent in housing policies, citing a “serious situation.”
California, like other states attacked by natural disasters, has faced the threats of the main insurers: increase the rates, or we abandoned the state, said Carmen Balber, executive director of Consumer Watchdog, who led the efforts in the audiences.
“The commissioner has shown a tendency to roll in front of the threats of the insurer to leave,” said Balber. The increase “adds insult to the injury” at a time when many owners insured by State Farm have reported delays or attempts by the state farm to lowball claims after the fires earlier this year, he added.
In a statement, Ricardo Lara, the State Insurance Commissioner, presented the rate increase as a difficult commitment to consumers. “Let me be clear: we are in a state insurance crisis that affects millions of Californians,” he said. “Making this requires difficult decisions.”
An administrative judge within the California Insurance Department approved the increase in the provisional rate, after a hearing in April in which lawyers for the consumer control agency repeatedly asked State Farm to open their books and show why he needed such a large infusion of cash. According to Mrs. Balber, the insurer refused to provide paperwork that corroborate the terrible financial narrow of the insurer.
Meanwhile, the actuaries of the consumer group themselves prepared a simulation of the profits of the General State Insurance Company of the state of the premiums and the projected losses of recent forest fires. The actuaries concluded that both the state farm had exaggerated the financial tension and that the increase in the rate was not justified, said Balber.
Provisional rates enter into force on June 1. There is the possibility that rates can be challenged again at an audience this fall, when the question of the open farms of California is financial. The audience will be addressed, said Mrs. Balber.
According to the California insurance commissioner, this subsequent hearing will be when the state farm will be required to justify its financial condition and detail its recovery plan. ” The Administrative Law Judge determined that State Farm “is experiencing extraordinary financial difficulties, together with the exhausting grievance that threatens commercial operations,” according to Mr. Lara’s statement.
In a statement, on its website, State Farm said that the insurer remains “deeply concerned about the financial position of State Farm General”, the subsidiary of the California insurer, “since it is difficult to match the price of risk in California.” The statement also pointed to the decision of the global S&P qualification on Tuesday to degrade the subsidiary of the California state farm of a “AA” rating to a “A+” rating, a movement attributed partly to “a significant detection” in the capital of the company.
Duration The recent audience in California and in the process that followed, State Farm was forced to make some concessions, which reduces the increase in rates to 17 percent, from almost 22 percent, as well as to ask Pharm to provide an infusion of $. For years, the defenders of policy holders have argued that the way in which insurers have organized timbales, with the main national companies such as State Farm that have a national company and a subsidiary of California, protects the insurer but not the client.
The highest rate occurs after the survivors of the Fire Eaton in the organized Altadena working class community, first in a WhatsApp group dedicated to Pickleball and later in Discord, a better known platform for the games.
There were found and collected hundreds of first -hand accounts from insured owners with the state farm in California, who struggled to receive the payment. Just when their houses had leveled their legs, said Joy Chen, former attached mayor of Los Angeles and the group leader, now known as Eaton Fire Surevors Network.
“The ability to approve rates increases is one of the few application powers that the commissioner has,” he said. “When it addresses an increase in rates without even examining whether a company is real that provides the service you paid to provide, then the systemic abuse is illuminated,” he added. “And he sends a message to all Californians who pay the insurance premiums that he can pay, decade after decade, but if the disaster occurs, his insurer may not be there, and his government can turn a blind eye.”
In a statement sent by email in response to the questions about the statements of the victims of Forest Fire in California who say they have been denied or low unjustly by State Farm, a spokesman for the insurer added that the company was the company that faces the face in front of the face in front of the face in front of the face in front of the face in front of the face towards the face. “We actively work with each of our clients to resolve their claim,” wrote spokesman, Sev. Sarkissian.
If the increase in the State Farm rate is, it is likely that other insurers do the same.
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