State Farm raising insurance rates for California drivers

If you are a California driver with State Farm, your car insurance is about to get more expensive.

A total 3.7 million drivers will see an average annual increase of 6.9%, or $71 per policy effective May 15 after State Farm got approval from the California Department of Insurance for the $264 million increase, the insurance agency confirmed to FOX LA. The rate hike applies to both new business renewals.

The increase is due to the home and auto insurance company raising rates that were originally lowered during the COVID-19 pandemic, when shelter-in-place orders were in effect and people were seldom driving. Now that everyone is getting back on the roads, those pandemic-era rates are now a thing of the past.

"We are continuously monitoring and adjusting to trends to make sure we're matching price to risk. As more people are on the roads, we're seeing an increase in claims. Auto claim costs are being compounded by record inflation and supply chain disruptions. All of this has increased the cost of labor and materials, which translates to higher auto repair costs," a spokesperson told FOX LA.

Other insurance providers including Mercury, GEICO, and Allstate are also reportedly increasing rates.