Consumer Watchdog Says Farmers' Filing Exhibit A for Loopholes in Lara Plan: Shows Net Loss of 15,000 Policies In Distressed Areas And 59,000 Policies Overall In Exchange for Up To 65% Rate Hike

LOS ANGELES, Nov. 24, 2025 /PRNewswire/ -- The recent filing from Farmers Insurance under Insurance Commissioner Lara's "Sustainable Insurance Strategy" is the poster child for the loopholes in the plan, allowing the company to hike rates steeply without increasing overall policy levels, according to Consumer Watchdog.

While claiming to increase the number of policies in "distressed" areas by 5,596, Farmers' filing reflects a net loss of 15,225 policies in distressed areas and 59,806 polices overall from Farmers' policy levels at the time of the announcement of the strategy in September 2023. At the same time, if the filing is approved, Farmers would be allowed to raise rates on some customers by up to 65%.

Download an excel spread sheet about Farmers' filing.

Lara's September 2023 plan allowed insurance companies to raise rates in exchange for a purported commitment to insure 5% more people in so-called "distressed areas." However, as a front page New York Times investigation has found, loopholes in the plan allow companies to submit filings based on a lower bar of current policy levels, after dumping policyholders for the last two years to get their policy numbers to lower levels. In addition, the Times investigation found the way the maps were drawn in "distressed areas" often didn't include high wildfire risk areas.

Farmers filed for a 6.99% average rate hike. Policyholders will see a range of rate changes from -20% up to 65% increases for their coverage – the 65% falling on the higher risk properties that are already being priced out of the market. About 25,000 policies, roughly 3% of the total policies, will receive an increase of between 25% and 65%, according to the filing. Because the rate is below 7%, there is no mandatory hearing for the rate hike.

"Farmers' filing is Exhibit A for the loopholes in Lara's plan," said Jamie Court, president of Consumer Watchdog. "Farmers is able to raise rates for its highest risk policyholders by up to 65% in exchange for selling 59,000 less policies in the state than when Lara announced the deal. Hundreds of thousands of policyholders have been dumped and forced onto the FAIR plan over the last two years since Lara's strategy was announced. These filings will not reverse that trend. California's legislature needs to require companies to insure people who meet wildfire mitigation standards. This filing is proof that carrots do not work with insurance companies. California's insurance companies needs sticks."

From September 2023, when Lara's plan was announced, until September 2025, the number of residential FAIR policies has nearly doubled, rising to 625,033 from 320,581.

SOURCE Consumer Watchdog