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Farmers Insurance Exposes Loopholes in State Plan
25 Nov
Summary
- Farmers Insurance filing allows steep rate hikes.
- Filing reflects net loss of over 59,000 policies.
- Consumer Watchdog calls plan a poster child for loopholes.
Consumer Watchdog has identified Farmers Insurance's latest filing as a critical example of exploitable loopholes within California Insurance Commissioner Lara's "Sustainable Insurance Strategy." The filing, submitted recently, allegedly allows Farmers to significantly increase insurance rates for some policyholders by as much as 65%, while simultaneously demonstrating a net reduction in overall policy numbers.
Despite the strategy's stated goal of increasing insurance coverage in "distressed" areas, Farmers' filing indicates a net loss of over 59,000 policies since September 2023. This move allows for steep rate hikes, with approximately 3% of policies facing increases between 25% and 65%, particularly impacting higher-risk properties.
Consumer Watchdog argues that this filing proves the strategy's reliance on incentives, or "carrots," is insufficient, advocating for stricter regulations, or "sticks," to ensure insurance companies actually insure residents meeting wildfire mitigation standards.
