State Farm pushes to keep rate hike documents secret

State Farm pushes to keep rate hike documents private

The insurance company has lobbied for permission to keep from the public certain documents detailing and justifying large increases for some policy holders in the wake of devastating wildfires in Southern California.

SAN RAFAEL, Calif. - The huge but conditional homeowner insurance rate increases granted to State Farm last month had its first of many days before the legal system, and KTVU forced its way in. 

On Wednesday, State Farm asked a judge for permission to keep secret from the public certain documents to be used to show their justification for the large increases. 

The judge did not initially want to allow KTVU and the L.A. Times to listen in, but relented when all other parties agreed to it.

The hearing – loaded with legalese – has profound consequences for one-in-five California homeowners, and is a beacon for other insurers to follow. In Wednesday's court session, insurance consumers found no relief.

Insurance Commissioner Ricardo Lara allowed State Farm's emergency rate increase of 17% on its California homeowners' policies. Though State Farm-California agreed to get a $400 million loan from its parent company, it refused to stop non-renewing policies.

State Farm's request may be a violation of Proposition 103's transparency requirements. The state Supreme Court said to the insurance provider that the law is very clear. 

"Everything submitted to the Commissioner to support or opposed to a rate increase has to be made public," said Prop. 103 author and Consumer Watchdog founder Harvey Rosenfield.

State Farm did not respond to KTVU's request for a statement or interview.

What they're saying:

Home and car insurance customers shared with KTVU their thoughts on the rate increases.

"Our insurance essentially has doubled for no real reason in the last year and I know that is the case for a lot of homeowners," said insurance customer Amanda MacPherson. 

"I think it's important to be honest and up front with those people because ultimately, we're the ones purchasing from them and they say honesty is the best policy," said customer Jessica Maas.

The judge presiding over the hearing said he would rule on the secret documents after the parties make their arguments to him.