SAN DIEGO — Citing inflation and future concerns for wildfires, several of California’s biggest insurance companies have been given permission by state leaders to substantially raise rates.
“I thought it was a typo,” said Tony Obregon, who lives in a two bedroom condo in Mission Valley.
Obregon showed CBS 8 his homeowner’s insurance bill from 2023. He paid $383 dollars year. His bill for 2024? $2,108. An increase of more than 400%.
“I was shocked. I couldn't believe it," Obregon said. Turns out, Obregon is not alone.
Working for You, we went through state documents and discovered several big insurance companies have applied for and been granted increases well above the rate of inflation.
“The insurance industry is taking advantage of unique circumstances in the market today,” said Carmen Balber, Executive Director at Consumer Watchdog.
She says insurance companies are claiming inflation - combined with the fear of major fires - requires big rate hikes. But those have to be approved first by state leaders.
“They're threatening the department of insurance and politicians in Sacramento that they'll leave the state of California if they don't get what they want,” Balber said. “The insurance commissioner in some instances, is bending to that pressure, rushing through the rate increases that insurance companies are demanding without full review.”
State Farm, which has the largest market share for homeowners insurance policies in California, sent CBS 8 a statement,
“These rate changes are driven by increased costs and risk and are necessary for State Farm Mutual Automobile Insurance Company and State Farm General Insurance Company to deliver on the promises the Companies make every day to their customers.”
So how can you fight back? Experts said you shouldn’t just accept your bill and pay it.
“Consumers across the state are seeing rate hikes and what consumers need to know is that they do have the option to shop around,” Balber said.
That's what Obregon did and, fortunately, he already found a lower rate.
“With the cost of everything rising, and then on top of that the insurance premiums doubling, tripling, quadrupling, it's too much for people,” he said.
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