State Farm files insurance rate reductions in GA and CA
State Farm announced Thursday that millions of customers will see rate reductions, including a 6.2% decrease in California and a 3% decrease in Georgia.
“Eligible customers are already seeing returned value and improved policy benefits as we approach 2026,” the news release says. “These changes will benefit current customers at renewal, as well as new and returning customers. With positive trends including less costly physical damage claims, we can now offer these auto rate reductions to better serve customers.”
Rate reductions will vary by individual policy and renewal date, the release says. It adds that changes are subject to regulatory approval and could differ.
“The costs of auto and home ownership are rising. Insurance rates have spiked across the U.S. due to surging replacement costs, inflation, supply chain disruptions, and more frequent severe weather catastrophes,” the release says. “We know that price matters as much as service. As a result, regular rate reviews and adjustments are necessary to help keep insurance coverage available and affordable for our customers.”
The company says it has already submitted a rate filing to reduce auto insurance by 6.2% in California. It targets an effective date of Feb. 23, pending approval by the California Department of Insurance.
“Recent trends involving less costly physical damage claims have allowed State Farm to lower rates,” State Farm says in a release specific to California.
“As many Americans continue to face challenging economic conditions, State Farm is actively working with elected officials and industry partners on creating a sustainable insurance environment in California — one that balances risk and increased rates, ensures long-term market stability and availability,” the release says.
In a Georgia release, the insurance company states it has filed for another 3% decrease, which would be an overall reduction of 10% in the past year in the state.
The overall reduction since December 2024 amounts to more than $400 million in lower total annual premiums for customers in Georgia, averaging over $190 saved per vehicle, the release says.
“We are pleased to help our customers save money by offering increasingly competitive rates, combined with the personalized attention of our local agents and first-rate customer service,” said State Farm Senior Vice President Allyson Watts in the release. “Serving our Georgia customers by offering affordable private passenger auto insurance remains a top priority for State Farm.”
The Georgia release also states that the company can lower auto rates due to fewer costly physical damage claims.
State Farm does not provide details about how physical damage claims have become less costly.
The insurance company has received national attention for a series of lawsuits across multiple states that claim it uses software to undervalue actual cash values.
Fender Bender and CRASH Network also recently reported on surveys that show shops have seen State Farm reducing labor rates.
In July, Fender Bender reported that 57% of 230 survey respondents said State Farm had reduced its labor rates offered to their shop without explanation.
CRASH Network’s latest quarterly “Collision Industry Business Perspectives” survey found that 1 in 4 of 300 shop respondents said one insurance company is currently paying a lower labor rate than it was back in January.
“State Farm was the most common insurer cited by survey respondents, and the labor rate decreases weren’t insignificant,” Yoswick said while sharing some of the survey findings with RDN earlier this month.
State Farm went from $60 per hour to $55 per hour, and we are not a DRP for them,” one shop wrote of the 8.3% drop.
Without naming the insurance company, an open mic session at a Collision Industry Conference meeting earlier this month sparked discussion about the systemic lowering of labor rates by a large insurer.
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