California:
Insurance Companies Profit from Disasters

Feb 17, 2025

State Farm, the largest home insurer in California, is asking state regulators for a big rate increase, averaging 22%—even though State Farm already raised premiums in California by 27% in the last two years alone.

State Farm says it needs this rate hike because it has been losing money. It claims the catastrophic wildfires in Los Angeles and other disasters in California in recent years will totally ruin the company.

But that’s a lie. State Farm is the largest insurer of homes, auto and business in California AND the rest of the country—and the property/casualty insurance industry has been rolling in the dough. In 2023, the industry made a whopping 88 billion dollars in profit—a record which didn’t even last a year. In just the first nine months of 2024, the profits further skyrocketed to 130 billion dollars!

The insurance companies are doing this by denying coverage to hundreds of thousands of people in disaster-prone areas and jacking up rates for the remaining customers. In Los Angeles County, for example, insurers dropped more than half a million homeowner policies between 2020 and 2022, according to the California Department of Insurance.

One couple who lost their home in the recent L.A. County fires, Jewlz and Terry Fahn, told ABC News that they felt betrayed by State Farm. For more than 20 years, the Fahns said, they paid their premiums and never made a claim. But State Farm refused to renew their policy last fall, just a few months before the fires.

For big capitalists, weather-related disasters are just another way to jack up profits—by squeezing the very people whose lives are being destroyed.