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Deal allows State Farm to keep rate hike, without scrutiny over firestorm payouts

A brokered deal with regulators and consumer advocates will allow State Farm General to keep controversial increases in home insurance rates that took effect last year in the wake of the devastating Los Angeles wildfires.
The agreement sent to a judge late Friday cements a $530-million emergency hike in home insurance rates Insurance Commissioner Ricardo Lara negotiated with the insurer last summer.
“The agreement will provide financial relief to many policyholders while ensuring continued coverage for State Farm policyholders while California’s insurance market stabilizes,” the insurance department said in a news release.
State Farm argued the emergency hike was necessary because catastrophic fire losses jeopardized its financial ratings.
The company has reported that it paid out $6.2 billion in claims last year, largely from the wildfires, with most of the costs covered through reinsurance payments. The company has told regulators it anticipates to pay an additional $1 billion in claims.
The deal allows the insurer to keep an average 17% increase in homeowner rates. Local rates for many of the company’s 1 million home customers were much higher.
However, consumer advocates argued the agreement held the line on even higher increases and halted further policy cancellations that have deepened a crisis in the state’s insurance industry.
State Farm, California’s largest home insurer, froze new business in 2023, announced 72,000 mass non-renewals, and sought a series of rate hikes. Its average homeowners premium in California doubled from 2020 to 2024.
Under Friday’s agreement, State Farm agrees to forgo mass non-renewals in 2026 and undergo further review of its rates by 2027.
Additionally, State Farm will be required to return nearly two-thirds of its 15% increase to condominium owners, deliver a small refund to rental property owners and be able to raise premiums for renters a half a percent.
“This rate enables State Farm General to continue serving existing California customers,” the company said in a statement. “We will continue to monitor our capacity to support the risks we insure and maintain the financial strength needed to pay claims and support customers and communities when it matters most.”
If approved by an administrative law judge, the settlement will be forwarded to Lara, who is expected to back it.
The arrangement sidesteps efforts to tie State Farm’s rates to its handling of disaster claims.
Under pressure from community advocates and lawmakers, Lara in May had said he wanted the two issues evaluated together.
In June, Lara announced his department would conduct an “expedited” examination into State Farm’s market conduct. In rate hearing proceedings, agency staff sought to block discussion of State Farm’s claims handling in relation to its quest for premium hikes.
The pact does not directly address complaints of unhappy policyholders who say Lara’s administration has failed to hold State Farm accountable, which the insurance department has disputed.
A department spokesman said Lara would not comment on the matter while the rate settlement is before an administrative judge.
The Jan. 7, 2025, firestorm destroyed at least 16,000 homes, triggering more than 42,000 insurance claims. State Farm has said it has 13,500 fire and auto claims related to the fires.
The insurer has come under heavy criticism from fire victims over its handling of claims, including complaints of low payout offers, denials for toxin testing and delays in payments for living expenses. The company has declined to comment on the complaints.
Some 51,000 State Farm homeowners live in disaster areas struggling to recover from the L.A. firestorm. Regulatory filings show those areas among the hardest hit by the current hikes.
Malibu resident Chad Peters said his bill from State Farm increased 140% in the last year, from $3,500 to $8,400.
Peters said he has battled State Farm for 14 months over smoke and fire damage to his home from the Palisades fire, and that the insurer at one point attempted to cancel his coverage because the house remained unrepaired.
He called rate increases in such circumstances “ludicrous, while they’re giving everyone such a hard time with their insurance…I mean, mine has been a steep uphill battle all year long.”
Sen. Sasha Renée Pérez (D-Alhambra) had urged Lara to delay hikes until after the investigation into State Farm’s conduct.
“The fact that I have so many individuals who have not received any of their claims, that are still navigating denials and delays, who are actively running out of [living expense payments] and … facing housing insecurity — it makes me deeply concerned,” Pérez said.
Pérez, along with Sens. Ben Allen (D-Pacific Palisades) and Sade Elhawary (D-Los Angeles), in April pressed Lara to defer rate hikes until State Farm General’s claims practices could be investigated. “This was a big priority for us.”
Pérez said she would seek answers to the market conduct exam as part of a Senate inquiry into the insurance department’s handling of those complaints, along with scrutiny of the department’s discipline of a compliance officer who criticized State Farm’s handling of claims.
State Farm General, an offshoot of national insurance giant State Farm Mutual, contends it has been financially sinking as seasonal wildfires morph into catastrophic urban conflagrations that destroy towns.
In mid-2024, the company asked to raise home premiums by nearly $1 billion. Lara secured an agreement that State Farm Mutual lend its California affiliate $400 million, but the insurer would not agree to cancel plans for dropping 11,000 more policyholders.
The settlement allows State Farm to avoid a public hearing that would have forced the disclosure of solvency records, mass non-renewals and other information it said would help competitors.
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Russia Attacks Kharkiv and Kyiv in Ukraine
At least eight people were killed when a Russian missile hit a five-story apartment building in the city of Kharkiv, and Kyiv and several other regions also came under attack.
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VLT Image Captures a “Cosmic Hawk” Spanning its Wings.
The European Southern Observatory (ESO) just released its photo of the week. This image, acquired by the Very Large Telescope (VLT) in Chile, shows the RCW 36 nebula, located about 2,300 light-years away in the Vela Constellation. But to observers, it looks like a cosmic hawk spreading its wings: the dark clouds at the center resembling the hawk’s head and body, and the filaments extending to the right and left serving as the wings. And in a nice twist, the image itself was acquired by the High Acuity Wide-field K-band Imager-1 (HAWK-1) instrument on the VLT.
This high-performance, near-infrared imager is designed to capture deep, high-resolution images that allow it to penetrate the clouds of dust and gas that obscure dimmer objects, such as newly forming stars. Several new stars are visible beneath the hawk in the image, nestled amid clouds of nebula gas and dust. The intense radiation from these massive young stars illuminates the nebula, causing it to glow blue, red, and white. However, it is the population of faint brown dwarfs that was of interest to the astronomers taking this image.
Brown dwarfs are essentially sub-stellar objects, very large gas giants that were not massive enough to undergo gravitational collapse and fuse hydrogen. The HAWK-1 is ideally suited to this task, combining high sensitivity with adaptive optics that correct for atmospheric interference. This allowed the international team, led by astronomers from the Instituto de Astrofĩsica e Ciências do Espaço (IA) in Lisbon, to identify the many fainter objects in the picture. Their efforts are described in a paper that appeared in *Astronomy & Astrophysics*: “Substellar population of the young massive cluster RCW 36 in Vela.”
In addition to providing vital data that will improve our understanding of how brown dwarfs form, the study produced a striking image. Afonso do Brito do Vale, a PhD student at the IA and the lead author on the paper, described it as “massive stars ‘pushing’ away the clouds of gas and dust around them, almost like an animal breaking through its eggshell for the first time.” This completes the image, giving the impression that the hawk is protecting these baby stars and brown dwarfs as if they were its eggs. Over time, new stars will “hatch” and join the nest!
Further Reading: ESO, Astronomy & Astrophysics
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No more Noem mess. But don’t pop the champagne yet
Her gleeful cruelty was matched only by the audacity of her incompetence.
Packaged in cosplay costumes — cowgirl, solider, even firefighter and pilot — we were supposed to see her as strong. But far from the mother of dragons she seems to envision herself as, she came across as the killer of Cricket (poor pup), a childish narcissist in a deadly serious job.
It was so over the top, you don’t even need a name. You know who I’m talking about. So there’s little wonder that when President Trump dumped Kristi Noem as the head of Homeland Security this week, much of America — even a bipartisan slice, I dare say — reacted much like the residents of Oz when the house landed on the wicked witch.
From late-night talk shows to the halls of power, there was more than a bit of celebration, and some actually reasonable schadenfreude. Normally, others misfortune isn’t something I pile on, but oh, did that woman earn some scorn.
But while I’m not one to discourage a moment of joy in these troubling days, Noem’s unceremonious firing and what comes next likely won’t provide the relief and reset many are hoping for — or are claiming this is. For all the chaos and pain that federal agents from various departments have caused under Noem’s leadership, there’s every reason to believe Trump has plans to continue and even expand his deportation efforts, and maybe even use these poorly trained, poorly vetted troops to impose his will on the next election.
What we are witnessing, rather any acknowledgment of policy gone awry, is spotlight envy from a petty president who doesn’t like to share attention, and a backroom concession that maybe optics do matter when you’re attempting to cram white nationalism onto a pluralist country.
It was, according to Fox News and other media, a claim under oath that Trump authorized Noem to spend more than $200 million on commercials promoting herself instead of him that got her canned. Pointing to just how deeply unpopular Noem made herself even within the Trump-verse, this death knell came courtesy of a set-up by a GOP senator, John Kennedy (R-La.), who walked Noem to her own demise with awe-inspiring political skill.
After forcing Noem to claim on the record multiple times that Trump knew about and approved the mega-spend on Noem’s ludicrously over-produced ads (while also raising questions about the contract and who benefited), Kennedy — almost certainly knowing Trump would see it — laid this dig on her with dripping Southern knife-in-the-back charm.
“To me, it puts the president in a terribly awkward spot,” Kennedy drawled, likely implanting grievance directly into the president’s brain. “I’m not saying you’re not telling the truth. It’s just hard for me to believe, knowing the president as I do, that you said, ‘Mr. President, here’s some ads I’ve cut, and I’m going to spend $220 million … running them,’ that he would have agreed to that.”
Soon after, Trump posted on social media that Noem was out. I bring this up because it wasn’t, after all, the substance of Noem’s actions that ultimately got her fired. In that same hearing on Capitol Hill, Democrats blasted Noem for the deaths of Alex Pretti and Renee Good in Minneapolis and her subsequent false portrayal of them as domestic terrorists; the conditions inside our ever-expanding network of detention centers that have led to deaths; and even her mile-high airplane bedroom where she may or may not be conducting an extramarital affair.
None of that seems to have bothered Trump. It was her self-promotion. And it was that same self-promotion, the constant demanding of attention, that likely also ultimately convinced those around Trump to dump her — because it was adding to the deep unpopularity of immigration roundups that have been dragging down Trump’s approval ratings and which therefore could hurt the midterm chances of down-ballot Trumpers.
Last month, a Quinnipiac poll found that 58% of voters wanted Noem removed, and almost 60% of voters disapproved of Trump’s immigration policies.
Noem was the public face of that disapproval, strutting forward with arrogance in the face of public censure, a veritable clown show of ineptitude. With her ouster, and the possible replacement by another Trump stalwart, Oklahoma first-term Sen. Markwayne Mullin, Trump removes the most visible and annoying sign of the unpopularity of his policies.
While pugnacious (he’s a former MMA fighter) and happy to create his own questionable headlines, Mullin is also far more low-key than Noem, and knows who the spotlight belongs to. He is almost certain to put a more palatable face on deportations and detentions (for some anyway) simply by not being so thirsty for press. A low bar, but there you have it.
But Mullin has made it clear that he backs the most extreme immigration policies Trump world can offer, and has little difference of opinion from Stephen Miller, the architect of this bleak moment, who seems to be running things slightly off screen.
The risk now is that Mullin can continue these policies, even expand them, with less scrutiny simply because he’s less offensive than Noem. Detention centers are being built at breakneck speed. In Arizona, ICE has begun charging legal immigrants with a Cold War-era law if they don’t carry their papers with them at all times. The Department of Justice is gutting the ability to appeal deportations, in an effort to hasten them without recourse. Nothing is changing — except the speed and force with which ICE is moving forward.
And Trump has doubled down on claims that illegal immigrants are responsible for massive voter fraud, laying the groundwork for some sort of intervention in the upcoming election. Election deniers have been installed in key positions — Mullin himself is one of them.
So far from a reset, Noem’s removal is a retrenching — an effort to remove our focus from the deeply troubling link between immigration policy and the threat to democracy while actually grinding forward on that dark path.
Because Noem was a train wreck we couldn’t help but watch, at a moment when the government would prefer we stop looking.
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