What are the loopholes in California's insurance strategy?

Loopholes allow insurers to raise rates by artificially lowering their current policy numbers before filing for increases, as seen with Farmers Insurance.

How much can Farmers Insurance raise rates in California?

Farmers Insurance could raise rates by up to 65% on some policies under the proposed filing.

What is the "Sustainable Insurance Strategy" in California?

It's a plan allowing insurers to increase rates in exchange for a commitment to insure more people in distressed areas, though critics cite loopholes.

Home / Business and Economy / Farmers Insurance Exposes Loopholes in State Plan

Farmers Insurance Exposes Loopholes in State Plan

25 Nov, 2025

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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.

Farmers Insurance Exposes Loopholes in State Plan

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.