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consumer watchdog
Wildfire Survivors 'Deserve Better,' Advocates Say as California Approves State Farm Rate Hike
Regulators like California Insurance Commissioner Ricardo Lara "need to hold insurance giants like State Farm accountable to paying out what they owe, not reward them with rate hikes," said one watchdog.
May 14, 2025
California Insurance Commissioner Ricardo Lara on Tuesday adopted a judge's ruling allowing State Farm General, the state's largest home insurer, the ability to temporarily hike insurance rates following devastating fires that ravaged the Los Angeles area in January. The decision drew rebuke from watchdog groups, with one organization calling the hike "unjustified."
In February, State Farm sought a rate increase of 22% for homeowners and 15% for renters after the Los Angeles-area fires, citing the need to protect the "fragile California insurance market."
After conducting a hearing in April, an administrative law judge issued a proposed order on Monday, approving an emergency rate increase of 17% for homeowners line, down from the 22% the company had requested, and a 15% increase for renters. The emergency rate increase will go into effect June 1, according to the commissioner's office.
Carmen Balber, executive director of the group Consumer Watchdog, which has been active in opposing the State Farm rate hikes, said Tuesday that the decision "is a great disappointment" that forces "consumers to pay now" but allows "State Farm to wait months before having to show its math."
Consumer Watchdog argued before the administrative law judge that State Farm had failed to put forward adequate justification for the rate increases, and that the issue should go before a full rate hearing.
Lara said on Tuesday that State Farm will still need to justify its financial condition at a full hearing. According to Consumer Watchdog, that hearing is tentatively scheduled for October.
"State Farm policyholders, many of whom are struggling to get their claims paid by the company after the Los Angeles fires, are now facing double-digit rate hikes," Balber also said.
Lara gave sign off on the rate hikes despite calls for his office to probe complaints around the insurance giant's handling of claims made by survivors of the Los Angeles area fires, according to CalMatters. Fire victims have accused State Farm of denying or delaying claims, and had advocated for Lara to reject the rate hike request.
"The survivors of the Eaton and Palisades fires deserve better. Their stories of financial and emotional devastation after fighting with State Farm are heartbreaking and are an indictment of the state of the insurance industry," said Rick Morris, insurance campaigner with the watchdog group Public Citizen's climate program, on Tuesday.
"Regulators like Commissioner Lara need to hold insurance giants like State Farm accountable to paying out what they owe, not reward them with rate hikes," he added.
Public Citizen also highlighted accusations leveled by Consumer Watchdog in October of 2024 that State Farm had boosted profits for its parent company, State Farm Mutual, at the expense of policyholders.
As part of the ruling, according to the commissioner's office, State Farm will obtain $400 million from its parent company to boost its solvency and will also refrain from implementing some nonrenewals through the end of 2025.
State Farm stopped writing any new policies in May 2023, and last spring the company announced it would not renew plans for tens of thousands of homeowners—though it paused nonrenewals in Los Angeles County following the January wildfires.
Approval for the interim hike comes after State Farm General last summer asked for a 30% rate increase for its homeowners, a 52% rate increase for renters, and a 36% rate increase for condominium owners. Separately, in December 2023 it was approved for a 20% increase for homeowners and condominium owners.
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'So Much for Lowering Costs': Fury Over Musk's Death Wish for CFPB That Returned Over $20 Billion to Consumers
"The richest man in the world wants to shut down an agency that keeps people like him from ripping off the rest of us."
Feb 08, 2025
Defenders of a Consumer Financial Protection Bureau that has returned tens of billions of dollars to duped and defrauded U.S. consumers expressed outrage overnight and into Saturday after the independent agency was declared deceased by billionaire Elon Musk and its operations were handed over to the chief architect of the far-right Project 2025 Russell Vought.
Vought, who earlier this week was confirmed as head of the Office of Management and Budget by Senate Republicans, was named acting director of the CFPB by President Donald Trump, according to various reports.
The appointment of the far-right ideologue came less than a day after reports emerged that members of the Musk-led Department of Government Efficiency (DOGE) were granted access to key CFPB systems and Musk himself posted to his online social media X that the agency should "RIP," suggesting it was in the process of being dismantled or, in his mind, already killed.
"Since its creation, the Bureau has returned $21 billion to people's wallets by fighting against illegal financial charges, junk fees, debts, and fraud," said Mike Calhoun, president of the nonpartisan Center for Responsible Lending, in a statement on Saturday. Now, when people are already struggling to pay higher prices for necessities like eggs and milk, the Trump administration appears to have decided to deepen the pain by directly taking aim at the agency that helps keep our money safe."
"When people are already struggling to pay higher prices for necessities like eggs and milk, the Trump administration appears to have decided to deepen the pain by directly taking aim at the agency that helps keep our money safe."
"'Let them eat debt' is not a strategy for making America great again," Calhoun added, "and weakening the CFPB certainly isn't the way to keep working families, our financial markets, or our economy strong."
Stacy Mitchell, co-director of the Institute for Local Self-Reliance, which challenges corporate encroachment on the common good, said, "Obviously this isn't about 'efficiency.' It's about dismantling law enforcement that protects Americans from corporate power."
Congressional Democrats also reacted with contempt to Musk's message and the news that the agency's systems—like those of other agencies DOGE has put its hands on—were under threat.
"Here is the richest man in the world bragging about eliminating an agency that has delivered $21 billion back to working-class families since its inception," said Democrats on the House Committee on Financial Services, led by Ranking Member Maxine Waters of California. "Even most Republicans want the CFPB to continue protecting them from being ripped off by abusive big banks and predatory lenders."
"Here are the FACTS: 81% of voters, both Republicans and Democrats, support the CFPB and want the agency to continue its work," said Rep. Juan Vargas (D-Calif.), also a member of the committee. "Even so, Trump has moved to freeze the CFPB to take money out of YOUR pocket to line those of his billionaire friends."
In a letter sent to the CFPB on Friday—addressed to the previous acting director, Treasury Secretary Scott Bessent, whose first act of business was reportedly to order a halt of "all meaningful work"—Waters, Vargas, and 79 other Democratic members of the House said they were "deeply alarmed and troubled that you appear to be launching the Trump Administration's plan to contravene the will of Congress and unlawfully 'delete' this popular consumer watchdog that enjoys the broad bipartisan support of four out of five Americans."
According to the letter:
... we understand that you have ordered staff to halt all meaningful work of the CFPB, including ordering staff to stop investigating violations of consumer financial protection laws or settling enforcement actions, basically letting bad actors off the hook. We also understand that you have arbitrarily ordered the suspension of all CFPB rules that have yet to take effect, which would delay billions of dollars in savings and credit opportunities for consumers, if not rob them entirely.
We urge you to immediately rescind what appears to be an illegal stop work order and allow the public servants at the CFPB to get back to work for the American people as required by law.
As of this writing, the CFPB's homepage (www.consumerfinance.gov) prominently displayed a 404 error message, though portions of the site appeared to be active.
In a Saturday statement, the Democrats on the House Finance Committee said the 404 image on the CFPB website was intentionally "deceptive," calling it "a brazen attempt to fool consumers and the public about the status" of the agency.
"As of this moment, links and pages are still up and functional on the website," the statement said, "including the Consumer Complaint portal and database and Home Mortgage Disclosure Act (HMDA) database. Various aspects of the CFPB's web content is required by statute to be published and available on the CFPB's website."
"Let's be clear: the people cheering this the loudest are scammers and people who don't want you to keep your hard-earned dollars. So much for lowering costs."
Nadine Chabrier, counsel at the Center for Responsible Lending, said the "deeply troubling" developments at the agency will "undermine the CFPB's mission to protect consumers from financial misconduct" of various kinds.
"CFPB has returned more than $20,000,000,000 to consumers since it was founded," said Rep. Gabe Amo (D-R.I.) on Friday evening in response to Musk's tweet. "Let's be clear: the people cheering this the loudest are scammers and people who don't want you to keep your hard-earned dollars. So much for lowering costs."
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State Farm Accused of Trying to 'Cash in on a Terrible Tragedy' With $740 Million 'Bailout'
The head of Consumer Watchdog argued the company is "detouring the rules that protect state consumers from insurance price gouging."
Feb 04, 2025
The insurance giant State Farm on Monday asked California state insurance regulators to approve an emergency interim rate hike of 22%, drawing pushback from the nonprofit Consumer Watchdog, which accused the company of not providing the financial data necessary to justify the increase.
"State Farm wants to fill its bank accounts on the backs of California homeowners, some of whose homes are in ashes," said Carmen Balber, Consumer Watchdog's executive director. "Insurance Commissioner [Ricardo] Lara must require State Farm to prove it needs this staggering increase."
Devastating wildfires ravaged the Los Angeles area starting in early January, compounding an already escalating insurance crisis in the state and causing between $35 to $45 billion in insured property losses, according to one estimate. The fires, which are now either out or fully contained, generated over 8,700 claims for State Farm General, the California homeowners insurance affiliate of the firm State Farm Mutual Automobile Insurance Company. The compnay said it has paid over a billion to customers due to the blazes.
State Farm General is the largest insurance group in the state. The firm stopped writing any new policies in May 2023, and last spring the company announced it would not renew plans for tens of thousands of homeowners—though it has said it will renew policies for those impacted by the recent fires in Los Angeles County.
In a letter to the California Department of Insurance, leaders at State Farms General requested that the department take "emergency action to help protect California's fragile insurance market," by allowing interim rate increases of 22% for homeowners, 15% for renters, 15% for condo owners, and 38% for rental dwellings.
"State Farm General's rate filings raise serious questions about its financial condition," department spokesman Gabriel Sanchez said, according to the outlet Insurance Business.
Proposition 103, a measure passed in 1988 which sought to protect consumers from arbitrary insurance rate hikes, requires insurance companies to back up their rate applications with "comprehensive data," according to the California's insurance commissioner.
Consumer Watchdog said that State Farm General is asking for an increase on an interim basis, meaning "without having to prove that it needs that increase, or the impact higher premiums will have on the ability of consumers to afford coverage."
The letter from State Farm General to the department includes an "illustration of State Farm General financial deterioration" as an attachment.
According to Consumer Watchdog, the requested 22% hike on home insurance rates amounts to $740 million a year for the company. The group has called the request a "bailout."
The request comes after State Farm General last summer asked for a 30% rate increase for its homeowners, a 52% rate increase for renters, and a 36% rate increase for condominium owners. In December 2023 it was approved for a 20% increase for homeowners and condominium owners.
The insurance company is "trying to cash in on a terrible tragedy by detouring the rules that protect state consumers from insurance price gouging—at a time when those safeguards are more important than ever," said Balber.
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