State Farm fired a top executive, Haden Kirkpatrick, following the release of an undercover video showing him making disparaging remarks about California homeowners and admitting to manipulating the company’s rate hike request. Kirkpatrick stated that State Farm strategically used the threat of policy cancellations to pressure the Department of Insurance into approving a substantial rate increase following recent wildfires. This follows the Insurance Commissioner’s rejection of State Farm’s initial 22% rate hike request, pending further evidence. State Farm denies Kirkpatrick’s assertions, stating they do not reflect company policy.
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State Farm General, California’s largest home insurer, is under fire for allegedly inflating profits by purchasing expensive reinsurance from its parent company, State Farm Mutual, while simultaneously requesting a 30% rate hike. Consumer Watchdog alleges that State Farm General received minimal return on its $2.2 billion reinsurance investment (2014-2023), significantly less than comparable insurers. This questionable reinsurance practice, totaling approximately two-thirds of its purchases from its parent company, is cited as a primary justification for the requested rate increase. The California Department of Insurance is investigating these allegations, seeking clarification on State Farm General’s financial status and reinsurance arrangements before making a decision on the rate hike.
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State Farm’s decision to discontinue coverage for 72,000 homes and apartments in California is yet another blow to the already struggling state insurance market. As California’s largest insurer, State Farm cited soaring costs, increased risk of catastrophes like wildfires, and outdated regulations as reasons for not renewing policies on 30,000 houses and 42,000 apartments. This move comes after the company stopped issuing new home policies in the state nine months ago. The impact of this decision is significant, especially for those affected by the sudden loss of coverage.
As someone living in Southern California, where home insurance premiums have been skyrocketing, this news hits close to home.… Continue reading
John Q. Hosedrinker