California, September 25, 2025
News Summary
Five major property insurance companies, including Mercury and USAA, are returning to California with new regulations aimed at enhancing homeowners’ coverage. This move follows updated regulations introduced by Insurance Commissioner Ricardo Lara, which allow insurers to consider various factors, including wildfire risks, when setting premiums. The companies have agreed to expand coverage in high wildfire risk areas and have requested a uniform rate increase of 6.9%. State officials hope this will stabilize the homeowners’ insurance market and reduce reliance on last-resort options.
California: Five Major Property Insurance Companies Return to State with New Regulations to Enhance Homeowners’ Coverage
Five property insurance companies are set to return to California, as confirmed by the California Department of Insurance (DOI). This announcement comes on the heels of updated insurance regulations implemented by Insurance Commissioner Ricardo Lara, which were introduced nine months ago following an exodus of several insurers from the state or their decision to drop policies.
The five companies planning to re-enter the California market are Mercury, CSAA, USAA, Pacific Specialty, and California Casualty. Notably, three of these insurers rank among the largest in California, indicating a significant shift in the property insurance landscape.
The newly established regulations will allow these insurers to consider a variety of factors, including the likelihood of catastrophes and costs related to reinsurance, when determining premiums. As part of their commitment to return, these companies have agreed to expand coverage options in areas that are particularly susceptible to wildfires, addressing a critical concern for many homeowners in California.
State officials are also striving to diminish reliance on the California FAIR plan, a last-resort insurance option for residents unable to obtain private policies, which has faced financial challenges due to a high volume of claims. Mark Pitchford, COO of California Casualty Group, noted that the Sustainable Insurance Strategy is intended to stabilize the homeowners’ insurance market within the state.
All five insurers have applied for a rate increase of 6.9%. This figure aligns with previous rate approvals granted under past insurance commissioners. Michael Soller from the DOI explained that this rate increase is contingent upon the insurers’ commitment to remain in the state and grow their operations, rather than reducing their offerings.
During a recent livestreamed conversation at the Clinton Global Initiative, Governor Gavin Newsom emphasized the necessity for national leadership on insurance matters, describing homeowners’ insurance as a critical global challenge. He acknowledged that while the modifications to the regulations may result in quicker rate increases, they are designed to foster a more stable market, ultimately benefiting homeowners seeking insurance coverage.
The revised regulations also allow insurers to employ catastrophe modeling techniques, which include analyzing wildfire history and climate patterns to evaluate risk more accurately when setting rates. Consequently, state reforms aim to strike a balance between ensuring the long-term sustainability of insurance providers and enhancing access to affordable insurance for residents living in wildfire-prone areas.
Key Features of the Insurance Companies Returning to California
| Company | Rate Increase | Key Focus Areas |
|---|---|---|
| Mercury | 6.9% | Expanding coverage in high wildfire risk areas |
| CSAA | 6.9% | Expanding coverage in high wildfire risk areas |
| USAA | 6.9% | Expanding coverage in high wildfire risk areas |
| Pacific Specialty | 6.9% | Expanding coverage in high wildfire risk areas |
| California Casualty | 6.9% | Expanding coverage in high wildfire risk areas |
FAQs
1. Which insurance companies are returning to California?
The five companies are Mercury, CSAA, USAA, Pacific Specialty, and California Casualty.
2. What prompted these companies to return?
The return follows updated insurance regulations instituted by Insurance Commissioner Ricardo Lara after many insurers had exited the state or dropped policies.
3. How will insurers determine premiums in California now?
Insurers can now consider factors such as catastrophe likelihood and reinsurance costs when setting premiums.
4. What rate increase have the returning insurers requested?
All five insurers have requested a rate increase of 6.9%.
5. What is the purpose of the California FAIR plan?
The California FAIR plan serves as insurance of last resort for those unable to secure private policies.
Deeper Dive: News & Info About This Topic
- KCRA: Five Property Insurance Companies Return to California
- CBS News: Five Insurance Companies Commitment in California
- Fox40: Five Property Insurers Return to California Amid New Reforms
- SF Chronicle: California Home Insurance Tool
- PR Newswire: California Insurance Company CIC Weighs Options
- Wikipedia: Insurance in the United States
- Google Search: California insurance market
- Google Scholar: California insurance regulations
- Encyclopedia Britannica: Insurance
- Google News: California property insurance
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MISSION VIEJO STAFF WRITER The MISSION VIEJO STAFF WRITER represents the experienced team at HEREMissionViejo.com, your go-to source for actionable local news and information in Mission Viejo, 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 Oso Fit 5K Fun Run and Community Health Fair, Walk Against Drugs & Community Fair, and National Night Out. Our coverage extends to key organizations like the Mission Viejo Chamber of Commerce and Providence Mission Hospital Mission Viejo, plus leading businesses in retail and education that power the local economy such as The Shops at Mission Viejo, Capistrano Unified School District, and Amazon Delivery Station. As part of the broader HERE network, including HEREAnaheim.com, HEREBeverlyHills.com, HERECostaMesa.com, HERECoronado.com, HEREHollywood.com, HEREHuntingtonBeach.com, HERELongBeach.com, HERELosAngeles.com, HERESanDiego.com, and HERESantaAna.com, we provide comprehensive, credible insights into California's dynamic landscape.
