SAN DIEGO — Citing inflation and future wildfire concerns, several of California’s largest insurance companies have been given permission by state leaders to raise interest rates significantly.
“I thought it was a typo,” said Tony Obregon, who lives in a two-bedroom apartment in Mission Valley.
Obregón showed CBS 8 his homeowner’s insurance bill from 2023. He paid $383 a year. His bill for 2024? $2108. An increase of more than 400%.
“I was shocked. I couldn’t believe it,” Obregon said. It turns out Obregon isn’t alone.
While working for you, we reviewed state documents and discovered that several major insurance companies had applied for and received raises well above the rate of inflation.
“The insurance industry is taking advantage of the unique conditions in today’s market,” said Carmen Balber, executive director of Consumer Watchdog.
She says insurance companies claim that inflation – combined with fear of wildfires – requires interest rates to be raised significantly. But it must first be approved by state leaders.
“They are threatening the Department of Insurance and politicians in Sacramento that they will leave the state of California if they don’t get what they want,” Balber said. “The Insurance Commissioner, in some cases, bows to this pressure, rushing to increase rates demanded by insurance companies without full review.”
State Farm, which has the largest market share for homeowners insurance policies in California, sent CBS 8 a statement,
“These price changes are driven by increased costs and risks and are necessary for State Farm Mutual Automobile Insurance Company and State Farm General Insurance Company to deliver on the promises companies make every day to their customers.”
So how can you fight back? You shouldn’t just accept your bill and pay, experts said.
“Consumers across the state are seeing interest rates rise and what consumers need to know is that they have a choice to shop,” Balber said.
This is what Obregón did, and fortunately, he actually found a lower price.
“With everything getting more expensive, and then on top of that, insurance premiums doubling, tripling, quadrupling, it just becomes too much for people,” he said.
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