State Farm, the largest insurance company in California, has asked state regulators to immediately approve a steep rate hike for homeowners to prevent a “dire situation” for its customers and the broader insurance market in the wake of the disastrous Los Angeles wildfires.

On Monday, the company sent a letter requesting the California Department of Insurance approve emergency rate increases averaging 22% for homeowners statewide.

It also asked for a 15% increase for renters and condo owners and a 33% hike for rental owners.

The insurer, which had previously issued warnings about its financial stability, said the increases are necessary to ensure it can continue to pay out claims after covering more than $1 billion in losses following the blazes in Southern California.

“Insurance will cost more for customers in California going forward because the risk is greater in California,” the company said in a statement.

It was unclear how much premiums could increase in the Bay Area or which parts of the region would experience the largest rate hikes. Statewide, the insurer covers roughly 15% of homes, more than 1 million homeowner customers.

In a statement, the insurance department said it planned to review State Farm’s request “thoroughly to ensure Californians are charged the appropriate justified rates,” adding it will “respond with urgency and transparency” with proposals to protect the state’s insurance market.

Citing growing wildfire risks due to climate change and rising rebuilding costs, among other factors, State Farm has stopped writing new policies anywhere in California since May 2023. Other providers, including Allstate and Farmers Insurance, have also paused or scaled back offering new coverage.

Over the past decade, insurers have also dropped hundreds of thousands of property owners in fire-risk parts of the state, forcing many onto the FAIR Plan, California’s expensive insurer of last resort. The cancellations came even as companies raised premiums statewide.

State Farm last March said it wouldn’t renew 30,000 homeowners policies, though it paused that process in Los Angeles County following last month’s fires, allowing those with policies on the books on January 7th the option to renew. The company, with more than 2.8 million home and other California property insurance policies, last fall projected dropping 1 million home and other property insurance policies in the state over the next five years.

State Farm’s plea to regulators follows a 30% rate hike request in June. At the time, the company asked the insurance department to grant a “variance” to raise premiums higher than usual due to the company’s uncertain financial outlook.

Illinois-based State Farm reported net losses of more than $6 billion in both 2022 and 2023. The losses came amid a “significant increase in homeowners incurred catastrophe claims,” according to the company’s financial results in February. State Farm is the largest casualty insurer in the country, according to the National Association of Insurance Commissioners.

With that request still pending, the company is now asking regulators to approve a smaller “interim” hike as soon as possible to help cover losses in the Los Angeles fires.