California Greenlights 17% State Farm Rate Hike, Prompting Backlash from Wildfire-Hit Homeowners

California regulators have approved a 17% increase in homeowners insurance rates for State Farm customers, drawing sharp criticism from residents still recovering from the devastating wildfires that swept through the state in January.

The rate hike, authorized by the California Department of Insurance, affects tens of thousands of policyholders and is one of the largest approved increases for a major insurer in recent years. State Farm, the state’s largest home insurer, argues the increase is necessary to account for the rising cost of claims, inflation, and climate-related risks.

However, homeowners in wildfire-ravaged regions say the move is not only poorly timed but fundamentally unfair. Many are still waiting for insurance payouts or struggling to rebuild amid a housing crisis and escalating construction costs.

“This increase feels like we’re being punished for a disaster that was beyond our control,” said Maria Thompson, a homeowner in San Bernardino County who lost her house in January’s wildfires. “State Farm should be helping us recover, not hitting us with higher premiums.”

Consumer advocacy groups have also slammed the decision, accusing both the insurer and regulators of ignoring the financial strain on families displaced or severely impacted by wildfires. “This sets a dangerous precedent,” said Carmen Balber, executive director of Consumer Watchdog. “Insurance companies shouldn’t be allowed to raise rates while dragging their feet on paying out legitimate claims.”

State Farm issued a statement defending the rate adjustment, citing actuarial data and an “urgent need to maintain financial strength in the face of growing catastrophe exposure.” The company says it remains committed to serving California customers and ensuring long-term sustainability.

Yet critics point out that the company had recently paused new homeowner policies in California, citing similar risk concerns leaving many to question how raising rates on existing customers addresses the core challenges.

The rate hike comes amid broader volatility in California’s home insurance market, where major insurers are increasingly pulling back due to the rising frequency and severity of wildfires. As the climate crisis intensifies, experts warn that more premium hikes and coverage restrictions are likely unless systemic solutions are found.

For now, homeowners like Thompson are left with few options. “We can’t switch companies easily. Most insurers have already left,” she said. “We’re trapped, and now we’re paying more for less peace of mind.”