California on Tuesday approved a 17% emergency rate hike for State Farm after the state’s largest insurer made an emergency request following January wildfires that devastated two Los Angeles communities.

Insurance Commissioner Ricardo Lara’s endorsement means the emergency rate hikes, a first for the state, are set to begin June 1. Renters and condo owners will see a 15% increase, and rental dwelling owners a 38% increase.

In addition to the rate increase, State Farm will receive a $400 million cash infusion from its parent company to address its “serious financial condition,” Lara said in a statement.

Also see: Consumer group sues California insurance commission to stop $500M overcharge

Lara said the decision to approve the rate hike didn’t come easily.

“I am balancing all the facts. Protecting all State Farm customers and the integrity of our insurance market is an urgent matter,” he said. “Let me be clear: We are in a statewide insurance crisis affecting millions of Californians. Taking this on requires tough decisions. This is not a game. This is not a media-driven moment for some to exploit — this impacts people I am committed to protecting.”

Bloomington, Ill.-based State Farm Mutual Insurance Co., which is made up of several companies in the U.S., insures more than 1.2 million California policyholders through its State Farm General division.

Related: California’s former insurance commissioner sees grim future, more wildfires

Carmen Balber, executive director of Consumer Watchdog, said State Farm’s rate hike could total $749 million. She expressed her disappointment that the commissioner is making consumers pay now for the wildfires, while State Farm gets “to wait months before having to show its math” before a full rate hearing scheduled for October.

“State Farm should not have gotten its rate hike imposed before it justified it,” Balber told the Southern California News Group. “We intend to make that case at the full rate hearing.”

Consumer Watchdog calculates that homeowners will pay about $468 more annually for their insurance premiums, while renters and condo owners will pay $57 more, and rental dwelling policyholders pay an additional $451.

Also see: Why all California homeowners could be on the hook for LA County wildfire costs

“Voter-approved Proposition 103 says a rate hike shouldn’t come before the rate justification, but that’s what happened here,” Balber said. “We urge the commissioner to reject the proposed decision so State Farm policyholders, many of whom are struggling to get their claims paid by the company after the Los Angeles fires, aren’t overcharged.

Proposition 103, passed by California votes in 1988, is designed to protect consumers from excessive insurance rates and practices.

Harvey Rosenfeld, the author of Prop. 103, said the decision means State Farm is the first insurance company in California to win a rate hike based on an emergency basis before an actual rate hearing.

Also see: Will California insurance reforms be enough to stop insurers from leaving?

“It’ll get State Farm a big windfall,” he said. “State Farm doesn’t need this money to pay its claims arising out of the L.A. wildfires. It wanted the money, and argued that it was too big to fail, just like the big Wall Street banks argued in 2008. They said they needed the money to restore their financial condition. It’s an astonishing result.”

State Farm initially sought a 22% rate hike in February after policyholders made $7 billion in wildfire claims, saying the increase was needed to keep the company solvent. State Farm executives said then that their finances were strained by more than $7.9 billion in claims filed by policyholders following the L.A. wildfires Jan. 7-8 in Pacific Palisades and Altadena.

The decision was first approved in March and then reconsidered by Lara, who sought more information from the company to justify the first-of-its-kind emergency rate hike for the state.

In March, Lara said he would approve State Farm’s emergency rate increase if the insurer could justify the hike. He requested the company halt non-renewals of homeowners’ insurance and pursue a $500 million capital infusion from its parent company in order to restore financial stability.

See more: 1 in 10 Los Angeles homes don’t have insurance, says one estimate

Administrative Law Judge Karl Frederic Seligman presided over a three-day hearing last month, at which time State Farm and consumer advocates argued for and against the rate hike request. Seligman is the same judge who endorsed the 17% rate increase sent to Lara.

“This adjustment aims to balance affordability for policyholders while ensuring necessary revenue for [State Farm],” Selig wrote May 12.

In mid-April, Consumer Watchdog filed a lawsuit against the California Department of Insurance and its commissioner to stop potentially hundreds of millions of dollars in “surcharges” State Farm wants to charge homeowners in order to cover claims from January’s firestorms.

Related: Southern California wildfires add to growing worries about homeowner insurance

The suit, filed Monday, April 14 in Los Angeles County Superior Court, challenges a plan approved by Lara in 2024 that permits insurance companies to pass through costs to policyholders for their share of an assessment issued by the FAIR Plan, the state’s insurer of last resort.

Lara agreed last summer to allow the FAIR Plan to assess traditional insurers for funds to cover losses that the FAIR Plan incurred after a catastrophe — such as the LA County fires. The FAIR Plan does not have a role in determining how insurers manage costs once Lara approves an assessment.

Consumer Watchdog argues in the suit that homeowners across California are now on the hook to pay up to $500 million worth of the $1 billion FAIR Plan assessment approved Feb. 11 by Lara after the Palisades and Eaton Canyon fires.

The FAIR assessment means that insured homeowners will pay even more than just the emergency State Farm hike.  Those increases for homeowners and others have not yet been calculated.

The group is asking the court to order Lara to not approve any of the surcharges, or pass-throughs.

The lawsuit alleges the commissioner’s decision to allow insurance companies to “shift potentially billions of dollars in costs to homeowners was reached without any public input or participation,” and violated administrative rules and procedures, as well as the FAIR Plan’s own statutes.