SACRAMENTO, Calif. (AP) — California's top insurance regulator on Friday said he would approve an emergency request by State Farm to raise premiums 22% on home insurance for about a million customers if the insurance giant could justify the hike at a public hearing.
State Farm, the state's largest insurer with roughly 1 million home insurance policies in California, said the emergency rate would help the company rebuild its capital following the Los Angeles wildfires that destroyed more than 16,000 buildings, mostly homes. The company is trying to prevent a “dire” financial situation that executives say could force them to drop more California policies.
California Insurance Commissioner Ricardo Lara said other California insurers won't be able to absorb State Farm's customers if the insurance giant stops doing business in California, but that he wanted more data on how the company manages its finances and calculates risks. He asked the company to present its argument publicly on April 8 to a judge, who will then give a proposed decision. Lara will then make a final decision.
“State Farm claims it is committed to its California customers and aims to restore financial stability. I expect both State Farm and its parent company to meet their responsibilities and not shift the burden entirely onto their customers," Lara said in a statement. “The facts will be revealed in an open, transparent hearing.”
The decision comes as California is undergoing a yearslong effort to entice insurers to continue doing business in the state as wildfires increasingly destroy entire neighborhoods. In 2023, several major companies, including State Farm, stopped issuing residential policies due to high fire risk. Lara last year unveiled a slate of regulations all aiming at giving insurers more latitude to raise premiums in exchange for more policies in high-risk areas. Those rules kick in this year.
California approved double-digit rate increases for nine out of ten largest insurers in California over the last few years, according to Consumer Watchdog, an advocacy group that opposes State Farm's request for higher premiums.
State Farm executives told state officials the company was already struggling before the LA fires. The company received a financial rating downgrade last year and has seen a decline of $5 billion in its surplus account over the last decade. Last year, the company asked the state for a 30% rate increase, which state officials are still considering.
The LA fires, which are now estimated to be the costliest natural disasters in the U.S. history, have made things worse, State Farm executives said. The company last month paid out roughly $1.75 billion to 9,500 claims and estimated the total loss to reach more than $7 billion. Its surplus also dropped from $1.04 billion at the end of 2024 to $400 million after the fires, according to State Farm. The company is using its surplus and reinsurance to settle the claims.
Without the ability to quickly rebuild its capital, banks and lenders could stop allowing State Farm insurance as collateral for mortgages and require State Farm policyholders to find coverage from different insurers, the company has argued. If homeowners can’t find a replacement, they’ll be forced on the FAIR Plan, which is designed as a temporary option to provide minimum coverage for those without private insurance.
More Californians are relying on the FAIR Plan than ever despite state regulator’s efforts to reduce the plan’s enrollment. The plan also needed a $1 billion bailout last month to pay out fire claims.
State Farm, in a statement, called Lara’s decision a “step in the right direction.”
“It’s time for certainty in the California insurance market for our customers,” the company said.
State Farm said it would halt cancelling and not renewing policies for “at least one year” if it gets the rate increase approval, according to Lara's office. The company last year announced it discontinued coverage for 72,000 houses and apartments in California after saying it would not issue new home policies in the state in 2023.
Homeowners with State Farm policies could pay up to $600 more in premiums a year if the increase is approved, according to Consumer Watchdog. The emergency rate request also includes a 38% for rental owners and 15% for tenants.
Carmen Balber, the group's executive director, applauded Lara's call for a public hearing.
“This is a win for consumers,” Balber said. “The company will have to make its case before a judge, and the public will have a chance to question the company and make its case as well.”
State Farm said it plans to refund the emergency rates if California later approves lower rates through the company's request last year. The insurer last received state approval for a 20% rate increase in December 2023.
Lara’s decision also comes after State Farm Mutual, the parent company, fired a top executive for saying the rate request was “kind of” orchestrated in a video published by O’Keefe Media Group. State Farm General, the California subsidiary, said in the same letter this week that the person did not have any responsibilities in the California’s operation and allegations that the company is manipulating the public were “baseless.”
FILE - A property burned by the Eaton Fire is seen Thursday, Feb. 6, 2025, in Altadena, Calif. (AP Photo/Ethan Swope, File)
FILE - An aerial view shows the devastation from the Palisades Fire on beachfront homes Wednesday, Jan. 15, 2025 in Malibu, Calif. (AP Photo/Jae C. Hong, File)
A federal judge on Monday questioned whether the Trump administration ignored his orders to turn around planes carrying deportees to El Salvador, a possible violation of the decision he'd issued minutes before.
District Judge James E. Boasberg was incredulous over the administration's contentions that his verbal directions did not count, that only his written order needed to be followed, that it couldn't apply to flights that had left the U.S. and that the administration could not answer his questions about the deportations due to national security issues.
“That's one heck of a stretch, I think,” Boasberg replied, noting that the administration knew as the planes were departing that he was about to decide whether to briefly halt deportations being made under a rarely used 18th century law invoked by Trump about an hour earlier.
“I’m just asking how you think my equitable powers do not attach to a plane that has departed the U.S., even if it’s in international airspace,” Boasberg added at another point.
Deputy Associate Attorney General Abhishek Kambli contended that only Boasberg’s short written order, issued about 45 minutes after he made the verbal demand, counted. It did not contain any demands to reverse planes, and Kambli added that it was too late to redirect two planes that had left the U.S. by that time.
“These are sensitive, operational tasks of national security,” Kambli said.
The hearing over what Boasberg called the “possible defiance” of his court order marked the latest step in a high-stakes legal fight that began when President Donald Trump invoked the 1798 wartime law to remove immigrants over the weekend. It was also an escalation in the battle over whether the Trump administration is flouting court orders that have blocked some of his aggressive moves in the opening weeks of his second term.
“There’s been a lot of talk about constitutional crisis, people throw that word around. I think we’re getting very close to it,” warned Lee Gelernt of the ACLU, the lead attorney for the plaintiffs, during the Monday hearing. After the hearing, Gelernt said the ACLU would ask Boasberg to order all improperly deported people returned to the United States.
Boasberg said he'd record the proceedings and additional demands in writing. “I will memorialize this in a written order since apparently my oral orders don’t seem to carry much weight,” Boasberg said.
On Saturday night, Boasberg ordered the administration not to deport anyone in its custody through the newly-invoked Alien Enemies Act, which has only been used three times before in U.S. history, all during congressionally declared wars. Trump issued a proclamation that the law was newly in effect due to what he claimed was an invasion by the Venezuelan gang Tren de Aragua.
Trump's invocation of the act could allow him to deport any noncitizen he says is associated with the gang, without offering proof or even publicly identifying them. The plaintiffs filed their suit on behalf of several Venezuelans in U.S. custody who feared they'd be falsely accused of being Tren de Aragua members and improperly removed from the country.
Told there were planes in the air headed to El Salvador, which has agreed to house deported migrants in a notorious prison, Boasberg said Saturday evening that he and the government needed to move fast. “You shall inform your clients of this immediately, and that any plane containing these folks that is going to take off or is in the air needs to be returned to the United States,” Boasberg told the government's lawyer.
According to the filing, two planes that had taken off from Texas' detention facility when the hearing started more than an hour earlier were in the air at that point, and they apparently continued to El Salvador. A third plane apparently took off after the hearing and Boasberg's written order was formally published at 7:26 p.m. Eastern time. Kambli said that plane held no one deported under the Alien Enemies Act.
El Salvador's President, Nayib Bukele, on Sunday morning tweeted, “Oopsie...too late" above an article referencing Boasberg's order and announced that more than 200 deportees had arrived in his country. The White House communications director, Steven Cheung, reposted Bukele's post with an admiring GIF.
Later Sunday, a widely circulated article in Axios said the administration decided to “defy” the order and quoted anonymous officials who said they concluded it didn't extend to planes outside U.S. airspace. That drew a quick denial from White House press secretary Karoline Leavitt, who said in a statement “the administration did not ‘refuse to comply’ with a court order.”
The administration argues a federal judge does not have the authority to tell the president whether he can determine the country is being invaded under the act, or how to defend it.
After Boasberg scheduled a hearing Monday and said the government should be prepared to answer questions over its conduct, the Justice Department objected, saying it could not answer in a public forum because it involved “sensitive questions of national security, foreign relations, and coordination with foreign nations.” Boasberg denied the government's request to cancel the hearing, which led the Trump administration to ask that the judge be taken off the case.
Kambli stressed that the government believes it is complying with Boasberg's order. It has said in writing it will not use Trump's invocation of the Alien Enemies Act to deport anyone if Boasberg's order is not overturned on appeal, a pledge Kambli made again verbally in court Monday. "None of this is necessary because we did comply with the court’s written order,” Kambli said.
Boasberg's temporary restraining order is only in effect for up to 14 days as he oversees the litigation over Trump's unprecedented use of the act, which is likely to raise new constitutional issues that can only ultimately be decided by the U.S. Supreme Court. He had scheduled a hearing Friday for further arguments, but the two organizations that filed the initial lawsuit, the ACLU and Democracy Forward, urged him to force the administration to explain in a declaration under oath what happened.
As the courtroom drama built, so did international fallout over the deportations to El Salvador. Venezuela’s government on Monday characterized the transfer of migrants to El Salvador as “kidnappings” that it plans to challenge as “crimes against humanity” before the United Nations and other international organizations. It also accused the Central American nation of profiting off the plights of Venezuelan migrants.
“They are not detaining them, they are kidnapping them and expelling them,” Jorge Rodriguez, President Nicolas Maduro’s chief negotiator with the U.S., told reporters Monday.
Trump's proclamation alleges Tren de Aragua is acting as a “hybrid criminal state” in partnership with Venezuela.
Family of some Venezuelans in U.S. custody scrambled to find out if their loved ones had been sent to El Salvador. Multiple immigration lawyers said they had clients who were not gang members who were being moved for possible deportation late Friday.
Franco Caraballo was held by immigration authorities during a routine check-in Feb. 3. His immigration lawyer, Martin Rosenow, said Caraballo not been accused of a crime. Caraballo's wife believes he’s been wrongfully accused of belonging to the gang because of a tattoo he got marking his daughter’s birthday,
He called his wife Friday night in a panic because he was being handcuffed and put on a plane to an unknown destination in Texas, from where flights to El Salvador departed.
That was the last the family heard of him and he's disappeared from the federal immigration detainee locator system. “I’ve never seen anything like this,” said Rosenow.
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Cano reported from Caracas, Venezuela. Joshua Goodman in Miami, Michael Kunzelman in Washington, D.C., and Nicholas Riccardi in Denver contributed to this report.
FILE - Republican presidential nominee former President Donald Trump speaks along the southern border with Mexico, on Aug. 22, 2024, in Sierra Vista, Ariz. (AP Photo/Evan Vucci, File)
In this photo provided by El Salvador's presidential press office, prison guards transfer deportees from the U.S., alleged to be Venezuelan gang members, to the Terrorism Confinement Center in Tecoluca, El Salvador, Sunday, March 16, 2025. (El Salvador presidential press office via AP)
In this photo provided by El Salvador's presidential press office, a prison guard transfers deportees from the U.S., alleged to be Venezuelan gang members, to the Terrorism Confinement Center in Tecoluca, El Salvador, Sunday, March 16, 2025. (El Salvador presidential press office via AP)
