California, September 25, 2025
News Summary
California has announced the return of five major property insurance companies: Mercury, CSAA, USAA, Pacific Specialty, and California Casualty. This follows new regulations by the California Department of Insurance aimed at stabilizing the insurance market after previous exits. The insurers have committed to increasing coverage in high wildfire risk areas and have requested a 6.9% rate increase. These reforms seek to reduce dependence on the California FAIR plan, enhancing access to affordable insurance for homeowners in vulnerable areas.
California has welcomed the announcement of five major property insurance companies planning their return to the state, as confirmed by the California Department of Insurance (DOI). This development follows a series of updated insurance regulations instituted by Insurance Commissioner Ricardo Lara nine months ago, designed to stabilize the insurance market after various insurers exited the state or dropped their policies.
The five insurers making a comeback include Mercury, CSAA, USAA, Pacific Specialty, and California Casualty, among which are three of California’s largest providers. These companies have committed to enhancing coverage in areas identified as high wildfire risk, marking a significant shift in the state’s insurance landscape.
The updated regulations permit insurers to consider factors such as the likelihood of catastrophes and the costs associated with reinsurance when setting premiums. This change aims to provide a more accurate assessment of risk and assist insurers in offering coverage in challenging areas.
One of the goals of state officials is to reduce dependence on the California FAIR plan, an insurance program designed as a last resort for homeowners unable to obtain private coverage. This program has encountered financial difficulties as a result of high claims, prompting the push for reforms that allow for private insurers to again play a significant role in the state’s insurance market.
Mark Pitchford, the COO of California Casualty Group, expressed that the Sustainable Insurance Strategy is intended to stabilize the homeowners’ insurance market in California, which has seen fluctuations due to various environmental pressures. This new approach by insurers follows a trend of increased rate requests; all five companies have sought a rate increase of 6.9%. This rate increase aligns with previous approvals under past insurance commissioners.
According to Michael Soller from the DOI, this increase is tied to a commitment from the insurers to remain and grow in California, rather than retreating from the market. Governor Gavin Newsom highlighted the importance of national leadership on insurance issues in a recent livestreamed conversation, underlining the ongoing challenges related to homeowners’ insurance and its significance on a global scale.
While acknowledging the potential for more rapid rate increases, Newsom emphasized that the reforms are aimed at creating a stable market. He believes these changes will ultimately enhance access for homeowners who live in wildfire-prone areas. Insurers now have the ability to utilize catastrophe modeling to evaluate risks by analyzing wildfire history and climate trends when determining rates.
Overall, California’s reforms aim to strike a balance between the long-term sustainability of insurance companies and the crucial goal of ensuring more residents in wildfire-inclined areas can access affordable insurance coverage.
Key Features of Insurance Return to California
| Feature | Details |
|---|---|
| Return of Insurers | Five major insurers: Mercury, CSAA, USAA, Pacific Specialty, California Casualty |
| New Regulations | Allows consideration of catastrophe likelihood and reinsurance costs in premium setting |
| Focus on Coverage | Increased coverage in high wildfire risk areas |
| Rate Increase | All companies requested a 6.9% increase, linked to commitments to stay in state |
| DOI Supervision | Guidelines aimed at reducing reliance on the California FAIR plan |
FAQ
Which insurance companies are returning to California?
Five property insurance companies are planning their return to California: Mercury, CSAA, USAA, Pacific Specialty, and California Casualty.
What prompted the insurance companies to return?
The announcement follows updated insurance regulations instituted by Insurance Commissioner Ricardo Lara nine months ago after several insurers had exited the state or dropped policies.
What is the new regulation regarding premium setting?
The new regulations allow insurers to consider factors such as catastrophe likelihood and reinsurance costs when setting premiums.
What coverage commitments have the insurers made?
The companies have committed to providing more coverage in areas of high wildfire risk as part of their agreement to return.
What is the significance of the rate increase requested by the insurers?
All five insurers have requested a rate increase of 6.9%, a figure consistent with previous approvals under past insurance commissioners.
Deeper Dive: News & Info About This Topic
- KCRA: California 5 Property Insurance Companies Returning
- CBS News: California 5 Insurance Companies Commitment
- Fox40: Five Property Insurers Return to California Amid New Reforms
- San Francisco Chronicle: California Home Insurance Tool
- Google Search: California insurance reforms
Author: STAFF HERE HUNTINGTON BEACH
The Huntington Beach Staff Writer represents the experienced team at HEREHuntingtonBeach.com, your go-to source for actionable local news and information in Huntington Beach, Orange County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Huntington Beach Surf City USA Marathon, the U.S. Open of Surfing, Fourth of July celebrations at the Huntington Beach Pier, and community festivals at Huntington Beach Central Park. Our coverage extends to key organizations like the Huntington Beach Chamber of Commerce and Visit Huntington Beach, plus leading businesses in retail, hospitality, and outdoor recreation that drive the local economy. As part of the broader HERE network, including HEREAnaheim.com, HERECostaMesa.com, HERESantaAna.com, and HERELosAngeles.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.
