LOS ANGELES, March 7, 2025 -- Consumer Watchdog wrote a letter to California Insurance Commissioner Ricardo Lara with new information showing why State Farm should not be granted an emergency 22% rate hike that includes a candid camera video recording of a company executive.
In the video recording, Haden Kirkpatrick, Vice President of Innovation and Venture Capital at State Farm, admitted the company orchestrated rate hike requests with talk of pulling out of California. Kirkpatrick was fired by State Farm as a result of the video.
In the letter, Consumer Watchdog Litigation Director Will Pletcher juxtaposed State Farm's comments at a recent meeting in Oakland where State Farm made its case for rate hikes with the blunt and contradictory statements made by Kirkpatrick, showing contempt for policyholders.
Questioner: "I heard that the insurances pulled out of the California fire. It seems like it is all, I don't know, orchestrated."
Kirkpatrick: "It kind of is, but not in the way you would think…We'll go to the Department of Insurance and say we're overexposed here, you have to let us catch up our rating… and they'll say 'eh' because the Department of Insurance and the Insurance Commissioner is an elected position in California. He'll say 'nah.' And we'll say, 'Okay, then we are going to cancel these policies.'"
At approx. time stamp 5:53 – 6:05 time stamp 6:33 – 6:56
"These remarks strongly suggest that policy cancellations are being wielded as a strategic bargaining tool rather than as a necessary response to financial risk," Consumer Watchdog Litigation Director Will Pletcher wrote in the letter to Lara. "This contradicts the impression State Farm sought to convey at the meeting—that it would remain in the market if rate relief were granted, and calls into question the transparency and good faith of State Farm's dealings with both regulators and policyholders."
"At the meeting, State Farm insisted to you that it 'want[s] to be in the California market,' 'to continue to serve the millions of customers in the State of California,' and that 'we want to support the California market,'" Pletcher wrote. "But Mr. Kirkpatrick's comments suggest a different attitude toward certain California homeowners at State Farm: 'Like in Marin County and Northern California, or some of the fringe areas, like where the Palisades are, there should never be houses built in the first place' because Californians are building homes in these locations 'where they have natural areas around them for their ego.' This statement reflects a dismissive attitude toward large portions of the state, raising further concerns about State Farm's true commitment to maintaining coverage for homeowners in California."
Consumer Watchdog wrote a separate letter to Lara taking issue with new information from the February 26, 2025 informal conference that confirms that why Lara should reject State Farm General's "emergency interim rate" requests: 22% for homeowners insurance (an average increase of $600 annually per homeowner policy), 38% for rental dwelling policies, and 15% for renters and condos.
Among the arguments made are that State Farm can cover Los Angeles wildfire losses; financial mismanagement, not catastrophe losses are to blame for State Farm's position; reinsurance transfers benefit the parent, not policyholders; a lack of transparency demands a denial of the rate hike, and no commitment was made to expanding coverage.
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