A report from a climate activist group says State Farm’s rate increases, if approved, would cost the average California homeowner more than $1,000.
State Farm upped its rate request in May, a week after getting the OK for a large rate hike to what the company had originally wanted before being rejected and agreeing to an interim deal for an increase. The wildfire-bitten insurer got approval for a 17% rate increase following billions of dollars in losses from the Los Angeles wildfires and pullback on writing new policies in the state.
An analysis from the Center for Climate Integrity says that if the additional increase is approved, the average California policyholder will be paying $1,015 more for homeowners insurance in 2026 than they did in 2023.
“It’s not fair that everyday Californians are forced to pay higher insurance rates because of a relentless stream of climate disasters, while the Big Oil companies fueling the crisis rake in profits and pay nothing,” stated Richard Wiles, president of the Center for Climate Integrity. “The insurance crisis is a direct result of the climate crisis that Big Oil has caused. Before insurers raise rates, they should stand up for their policyholders and fight to recover damages from the fossil fuel corporations whose climate pollution, obstruction, and disinformation are driving up costs for Californians.”
Under the already approved 17% rate increase, the average State Farm policyholder in California will pay $737 more for homeowners insurance in 2025 than they did in 2023, according to the report.
The largest percentage and dollar increases will occur in ZIP codes along the Sierra Nevadas, where wildfire risk is higher. The ZIP code with the largest dollar premium increase from 2023-2025 will be 91302 in Calabasas in L.A. County, where some 1,700 policyholders will see premiums increase an average of $6,832 (68%), according to the report.
Ceres
A report from climate leadership group Ceres finds that more insurers are disclosing climate-related risks.
The report, 2025 Progress Report: Climate Risk Reporting in the U.S. Insurance Sector, analyzes climate disclosures from 526 insurance groups representing more than 1,700 companies. It follows the pillars laid out by the Task Force on Financial Disclosures: governance, strategy, risk management, and metrics and targets.
According to the report, 99% of insurers reported on risk management, 97% reported on strategy and 87% reported on governance.
However, the report notes that “critical gaps persist,” particularly in the areas of setting measurable targets and “driving real accountability.”
Only 29% of insurers in the report disclosed metrics and targets, while 28% of insurers disclosed across all four pillars of the TCFD framework.
“These rising insurance risks associated with climate impacts stem from complex global factors beyond any single industry’s control, with many insurers already actively implementing diverse mitigation strategies and resilience measures to manage these evolving impacts,” the report states. “However, we are also seeing some insurers respond by retreating from high-risk markets, raising premiums to unsustainable levels, or imposing restrictive coverage limitations. This market constriction has triggered regulatory interventions, creating tension between ensuring market availability and maintaining industry financial stability.”
Fitch Warning
Fitch is warning about a rising mortgage-bond risk due to more extreme weather.
Fitch analysists keyed in the destruction of a Swiss village by a glacier as more proof that climate change is altering the laws of mortgage risk, according to a Bloomberg article on Insurance Journal.
Europe experienced the hottest year on record in 2024, as climate change combined with an strong El Niño to force glaciers into retreat.
“We expect physical climate events to happen more frequently and with more intensity,” Will Rossiter, a director of enhanced analytics at Fitch, said in an interview with Bloomberg.
He added that the impact these events are “having on a greater number of assets within a portfolio could increase.”
Fitch is in the process of integrating physical climate risks into credit assessments.
Rossiter said that the incident in Switzerland should be a reminder that when “climate shocks hit, their impact can be devastating,” the article states.
“The value of those properties has gone from whatever it was to nothing essentially overnight,” he added.
Hurricanes
“Stronger, more frequent, and costly hurricanes are reshaping lives across the United States—increasing fatalities, destroying homes and businesses, disrupting schools and hospitals, and forcing entire communities to rebuild from scratch.”
That’s from a new report from the Center for American Progress, a nonpartisan policy group, which calls out how “climate change-fueled hurricanes” are becoming more destructive, as well as raising costs and increasing health risks across the U.S.
According to the report, hurricanes are becoming increasingly destructive as the planet heats up, drawing energy from warm ocean water.
“As global temperatures rise, so do sea surface temperatures—providing more fuel for storms to grow stronger, wetter, and more dangerous than they were just a few decades ago,” the report states. “Rising global temperatures warm ocean surfaces and intensify evaporation, allowing tropical storms to pull in more heat and moisture. The most damaging hurricanes in the United States are now occurring three times more often than they did a century ago, and since 1980, the proportion of major hurricanes in the Atlantic Ocean has doubled.”
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