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.

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.

California Insurance Commissioner Ricardo Lara gave the green light to State Farm‘s emergency request to hike rates after the company suffered billions of dollars in losses due to the fires that devastated Los Angeles earlier this year.