State Farm reported that it has paid out $2.45 billion across 12,200 claims related to the January wildfires in Los Angeles, as loss totals continue to rise.
The company, the largest homeowners and personal auto insurer in California, said it insures approximately 250,000 homes and 880,000 vehicles in Los Angeles County.
In a statement, State Farm said it had deployed its full catastrophe response teams to manage the volume of claims following the fires, which began on Jan. 7 and caused widespread property damage.
Initial estimates released by the company projected direct losses of $7.6 billion. State Farm reported that, after reinsurance, retained losses could be approximately $212 million, according to AM Best.
In the aftermath, California Insurance Commissioner Ricardo Lara approved State Farm General’s request for an interim property insurance rate increase of between 21.8% and 38%. The approval came with conditions, including a temporary halt on policy nonrenewals and cancellations in the state through the end of 2025.
Lara also called on the insurer’s parent company, State Farm, to provide a $500 million capital injection to its California subsidiary. He said the rate changes would only remain in place if the company can justify its emergency filing with supporting data at an April 8 public hearing before an administrative law judge.
In 2024, State Farm reported significant financial figures influenced by various claims events. The company experienced an underwriting loss exceeding $6 billion, though it is a notable improvement from the $14 billion loss reported in 2023.
Catastrophic events during the prior year had a substantial impact, with the company paying out approximately $11.4 billion in catastrophe-related claims during the year. For instance, in mid-July 2024, severe convective storms across several states resulted in about 14,000 claims filed with State Farm.
As of March, insurance payouts related to the California wildfires have exceeded $12 billion, nearly doubling the $6.9 billion reported in February.
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