News & Analysis
April 4, 2025
As communities across the U.S. face heightened threats from wildfires, floods, and other extreme weather events that climate change is making more destructive, homeowners are seeing their property insurance rates skyrocket — or getting their policies cancelled altogether. Meanwhile, the major oil and gas companies who have knowingly fueled these disasters for decades continue to rake in profits and pay nothing.
According to a new CCI analysis, the average State Farm policyholder in California could now pay $841 more for homeowners insurance in 2025 than they did in 2023 in the aftermath of the catastrophic January wildfires that destroyed more than 10,000 homes and properties across the Los Angeles region. In some California zip codes, insurance premiums could more than double.
State Farm, the state’s largest private insurer, says they have no other choice than to raise rates following a reported $7.6 billion loss from the fires that experts agree was made 35% more likely as a result of fossil fuel pollution. But under a proposal currently in the California legislature, instead of raising rates or dropping customers, insurers would instead be empowered to fight on behalf of their policyholders to recover losses stemming from climate change from Big Oil companies — whose pollution and deception has fueled the crisis.
Senate Bill 222, the Affordable Insurance and Climate Recovery Act, would empower insurers and disaster victims to take major oil and gas companies to court to make them pay for the damages they’ve caused. If enacted, the bill could help stop costly rate hikes for policyholders and protect California’s insurance market from financial collapse.
“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” calculates the costs that State Farm policyholders across California will have to pay in order to remain insured under a tentatively approved 21.8 percent rate hike.
According to our analysis, 280,000 policyholders in 122 California communities, representing 30 percent of all communities with available data, will see average annual premiums increase by $1,000 or more since 2023. At least 5,000 policyholders in six communities could see average annual premiums increase by more than $3,000 over the two year period.
Recent polling shows that Californians support efforts to make oil and gas companies share the financial burden of extreme weather disasters that have been fueled by their pollution and decades-long deception.
“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.”
