State Farm’s insurance rates will go up because the California Department of Insurance said they could.
Experts say that this price increase will be an average of 20% across the state. But for each policyholder, that number could be bigger or lower. The price hikes will probably be biggest for people who live in places that are prone to wildfires. It’s getting harder for new California renters to find cheap homeowner’s insurance.
State Farm said it would stop writing insurance because costs were going up and the risk of wildfires was rising. Those who were interested were hurt because State Farm is the biggest insurance company in the state. The fourth-largest insurance company, All State, also said it would stop writing new plans. Farmers, the second-biggest insurance company, is also cutting back on the number of plans it will write.
These announcements all happened in the last year, which is a problem going into the new year, when interest and mortgage rates are expected to drop, which means a lot of people may want to buy a house.
Also Read: This Texas City is Becoming the First City With Another Guaranteed Income
Patrick Carlisle, chief market analyst for Compass, told KTVU on Tuesday, “Tax rates going down is great for affordability.” “Rising interest rates over the last two years have made housing more expensive.” “If we do indeed get more homes on the market, that will certainly help.”
People who own homes in the state can use the FAIR Plan, which is a last-resort policy through the government that provides basic coverage until new homeowners can find a stable policy.