State Farm has argued the emergency rate hikes are necessary to help the company avoid a “dire” financial crisis that could force them to drop more California policies.

Homeowners reeling from the wildfires in January say that State Farm’s increased rates are unfair and unfounded.

Following a judge's ruling Monday, State Farm customers in California are one step away from paying more on their homeowners insurance to alleviate what the company described as a "dire" financial situation in the wake of the Los Angeles-area wildfires.