Ahead of April 8 Hearings, New Report Breaks Down How State Farm’s Rate Hike in California Will Force the Rising Costs of Climate Disasters onto Policyholders — Instead of the Big Oil Companies Fueling the Crisis
March 31, 2025
CALIFORNIA — The average State Farm policyholder in California will pay $841 more for homeowners insurance in 2025 than they did in 2023, according to a new analysis from the Center for Climate Integrity that examines the impact of State Farm’s tentatively approved 21.8 percent rate increase in the aftermath of the Los Angeles fires.
State Farm must show data to justify the rate increase at a hearing in Oakland on April 8 — the same day that the California Senate Judiciary Committee will hold a hearing on SB 222, legislation that would empower and incentivize insurers to recover losses attributable to climate change directly from fossil fuel companies before further raising rates on policyholders.
“It’s not fair that everyday Californians are forced to pay higher insurance rates because of a relentless stream of climate disasters, while the Big Oil companies fueling the crisis rake in profits and pay nothing,” said Richard Wiles, president of the Center for Climate Integrity. “The insurance crisis is a direct result of the climate crisis that Big Oil has caused. Before insurers raise rates, they should stand up for their policyholders and fight to recover damages from the fossil fuel corporations whose climate pollution, obstruction, and disinformation are driving up costs for Californians.”
Report Findings
“Premiums on Fire: How State Farm’s California rate hike forces the rising costs of climate disasters onto policyholders instead of the Big Oil companies fueling the crisis” uses the proposed average 21.8 percent increase to calculate the costs that State Farm policyholders across California will have to pay in order to remain insured. According to the analysis:
The average State Farm policyholder in California will pay $841 more for homeowners insurance in 2025 than they did in 2023.
280,000 policyholders in 122 California county subdivisions, representing 30 percent of all communities with available data, will see average annual premiums increase by $1,000 or more from 2023 to 2025.
The largest percentage and dollar increases from 2023 to 2025 occur in zip codes along the Sierra Nevadas that have higher wildfire risk and those in Southern California that are at higher risk of wildfires and rising seas. In some of these zip codes, premiums will more than double in two years.
5,000 policyholders in 6 county subdivisions — Laguna-Pine Valley CCD, Agoura Hills-Malibu CCD, Alpine CCD, Coulterville CCD, Groveland CCD, and Jamul CCD — will see average annual premiums increase by more than $3,000 over the two year period.
The zip code with the largest dollar premium increase will be 91302 in Calabasas in Los Angeles County, where more than 1,700 policyholders will see premiums increase an average of $7,553.72, or 75%.
The report uses data from the U.S. Census Bureau and California Department of Insurance to calculate home insurance rate increases for State Farm policyholders for each zip code, county subdivision, assembly district, senate district, and congressional district across California. Find the full searchable dataset of costs here.
Californians Support Proposals to Recover Climate Costs from Polluters
CCI's report seeks to inform the growing debate about how officials can protect insurance policyholders from rising costs from climate change. State legislators and California’s former insurance commissioner have pointed to the role that fossil fuel pollution has played in making extreme weather events more frequent and destructive and called for making major oil and gas companies pay for the resulting damage. Senate Bill 222, the Affordable Insurance and Climate Recovery Act, would empower insurers, individuals, and the California FAIR Plan to recover their losses in court from major oil and gas companies. Supporters of the bill say it would protect California’s insurance market from financial collapse and stop costly rate hikes for policyholders. A February poll from CCI and Data for Progress found state voters widely support the proposal.