Friday, November 11, 2016

State Farm Insurance in California just got greedy, and was scorched by the state insurance commissioner

California Insurance Commissioner Dave Jones determined that rates charged by State Farm were excessive.

State Farm requested a rate increase of 6.9 percent, giving the commish the open door to check out their numbers... and WHAM!

On Tuesday the commish issued a decision requiring State Farm Insurance Co. to reduce
 its dwelling insurance rates by an average of 7.0 percent,
its homeowner insurance rate by an average of 5.37 percent,
 its renter insurance rate by an average of 20.39 percent,
and its condominium insurance rate by an average of 13.81 percent.

Resulting is $78.6 million in annual savings for California policyholders.

California Insurance Commissioner Dave Jones has ordered State Farm to refund homeowners insurance policyholders $104 million and reduce rates going forward. 1.7 million policyholders will receive refund checks.

The Consumer Federation of California intervened in the proceeding under Proposition 103, a 1988 initiative that ended price gouging by insurance companies. The voter-enacted law forces insurers to justify raise increases and allows customers and consumer groups to formally challenge proposed rate hikes.


  1. Totally unnecessary and intrusive government intervention. (Like 90% of government intervention) If State Farm charges too much, the free market will take care of it by people switching to less expensive insurance companies. Price gouging cannot exist for long in a free market and is much more often the result of barriers to entry of competitors by government regulation than it is eliminated by regulation.

    1. I disagree, based on the monopoly concept that the few who can conspire and artificially manipulate the prices, and the access, can charge anything they want. No consumer relief by switching to their competition. That is why there is some govt regulation, or has been. We already know that 3 or 4 corporations control the grocery store field, and the agricultural seed industry, and the car manufacturing and insurance, and the medical insurance, etc etc etc etc. When a handful of the grocery store CEOs had a meeting, and set prices and union contracts, and made a handshake agreement 10 years ago, they set up a monopoly on So Cal grocery stores, both the prices of the food, and the terms they'd offer the grocers union. Now, there is no where to go for a job to get ahead or around them, and there is no where to get groceries but them. Ditto the oil refineries in So Cal. There is one. It sets the price, as many years ago they paid off the right politicians to ban refined fuels from any other state being brought into So Cal. Now, that's pretty cool... getting the govt to make laws to protect your business and profits. Well, that worked out pretty well for the car insurance companies, you'll either pay them, and only the ones in So Cal can be paid for car insurance, or the police will impound your car for the insurance company. You seriously can either pay the price, or bike to work, or walk. Busses don't operate very thoroughly, there is a very limited light rail trolley commuter train here in San Diego... and that is just the way it is.... so, thank goodness the insurance companies are limited in their gouging by a govt watch oversight dept. If you don't agree, see how prices work on Amazon for a limited item, it's set by the highest price asked, and the comnpetition chips down a bit to get your business, but no one cuts hard at the price, they are just as greedy. I can cite examples of books as examples, but maybe you'll just agree... the consumer does not set the terms in this world

  2. Oh yeah, one other thing. Wanna see the free market in action? See your post below.

    1. Yes! I love it! No monopolies, just those that make an effort can succeed, and the old guard better stay on their game, or lose out to the new innovators