Stacy A. Korsgaden

In recent developments, California Insurance Commissioner Ricardo Lara has denied State Farm an emergency rate increase of 22% for homeowners insurance. This decision, while seemingly consumer-friendly on the surface, spells disaster for the largest insurer in the state, and by extension, for countless Californian families.

Let’s examine the facts using the Rotary Club’s 4-way test: Is it the truth? Is it fair to all concerned? Will it build goodwill and better friendships? Will it be beneficial to all concerned? Lara’s actions fail this test spectacularly. Denying the rate increase under the pretense of protection is a self-serving maneuver by a government official aiming higher in his career, not an act of altruism. This decision puts State Farm in a dire financial predicament, forcing it to consider drastic survival measures.

Should State Farm be forced to withdraw from California, families would be pushed towards the Fair Plan—a scheme offering limited coverage at higher costs. This is the direct result of political ambition overriding practical governance. State Farm itself has stressed that its survival hinges on matching prices with financial risks, something Lara’s current policies hinder.

The true issue at hand goes beyond climate change—the usual scapegoat. The heart of the matter lies in excessive government intervention and mismanagement. For years, our thriving insurance industry has been undermined by increasing regulatory burdens and governmental overreach, shifting focus away from critical issues like land and fuel management, crime, and economic regulation.

Insurance remains a cornerstone of any solid financial strategy, vital for both individuals and the state alike. California’s foundation is cracking under the weight of poor leadership. It’s time for change. We need leaders who will repair our systems, not politicians who use them as stepping stones for their careers. We need new leadership to secure a stable and prosperous future for California’s insurance industry.