State Farm Mutual Automobile Insurance Co. has requested a 6.2% reduction in its average private-passenger auto insurance rates in California, citing a decline in physical damage losses and lighter claims activity compared to the previous year.
This filing follows a recent rate hike of 17.7% for its independent California auto program, according to Best’s State Rate Filings. The shift highlights how rapidly the loss environment has evolved (see US Auto Insurance Rates by States).
State Farm noted that the reduction in claims is contributing to lower comprehensive and collision losses. The insurer anticipates the new rates will take effect in the first quarter of 2026, pending regulatory approval.
Dan Krause, Senior Vice President at State Farm, said the filing reflects what he called “increasingly competitive rates” in the California insurance market. Despite these reductions, State Farm continues to maintain its leadership position in the state for both personal auto and homeowners insurance.
“As we move toward 2026, eligible customers are already benefiting from enhanced policy features and returned value,” the company said in a press release.
The rate changes will apply to both current policyholders at renewal and new or returning customers. The company emphasized that positive trends, including a decrease in physical damage claims, made it possible to implement the rate reduction, ultimately benefiting customers.
Rate adjustments will vary depending on individual policies and renewal dates, with final changes subject to regulatory approval and possible variations.
“Auto and homeownership costs are rising. Across the U.S., insurance rates have surged due to factors like escalating replacement costs, inflation, supply chain issues, and more frequent severe weather events,” Krause explained. “We understand that pricing is just as important as service. Therefore, regular rate evaluations and adjustments are crucial to keeping insurance affordable and accessible for our customers.”
This filing follows the May 2025 decision by California Insurance Commissioner Ricardo Lara, who approved a ruling granting State Farm General’s interim property rate increases of 15% to 38%.
“As many Americans continue to face economic challenges, State Farm is collaborating with policymakers and industry stakeholders to create a sustainable insurance market in California that balances risk with reasonable rates and ensures long-term stability and availability,” Krause said.
State Farm has also been reducing auto rates in other states, including Georgia and Florida, signaling a broader trend of recalibrating rates as loss trends ease and competition intensifies.
In Georgia, the company has requested an additional 3% rate reduction, bringing the total decrease in the past year to 10%. The company reports that these adjustments will lower total annual premiums for Georgia customers by more than $400 million, with average savings of over $190 per vehicle.
“We’re pleased to offer our Georgia customers lower premiums while maintaining competitive rates and providing personalized service through our local agents,” said State Farm Senior Vice President Allyson Watts.
State Farm reiterated that providing affordable private-passenger auto insurance to its Georgia customers remains a top priority.
The company attributed its ability to lower rates in both Georgia and California to the decline in costly physical damage claims.
