California, September 25, 2025
News Summary
California’s homeowners’ insurance market sees a revival as five major insurers, including Mercury and CSAA, return following updated regulations. These changes allow companies to consider catastrophe risk and reinsurance costs, aiming to stabilize the market. The insurers have committed to offering more coverage in high wildfire-risk areas amidst a national call for better insurance solutions. A 6.9% average rate increase aligns with their commitment to maintain presence and expand offerings in the state.
California is set to welcome back five major property insurance companies as confirmed by the California Department of Insurance (DOI). This announcement marks a significant step in reviving the state’s homeowners’ insurance market after a period during which multiple insurers had exited or reduced their offerings. The five companies returning include Mercury, CSAA, USAA, Pacific Specialty, and California Casualty, with CSAA and Mercury as two of California’s largest insurers.
The re-entry of these insurers follows updated regulations introduced by Insurance Commissioner Ricardo Lara nine months ago. These regulations allow insurance companies to consider critical factors such as the likelihood of catastrophic events and reinsurance costs when determining premiums for homeowners. This flexibility aims to stabilize the market and enhance coverage options, particularly in areas deemed high risk for wildfires.
As part of their commitment to returning to California, the five insurers have agreed to provide more robust coverage for properties situated in high wildfire-risk areas. This initiative is expected to alleviate the growing dependence on the California FAIR Plan, a program that serves as the last resort for homeowners who cannot obtain private insurance. The FAIR Plan has faced substantial challenges, including financial difficulties stemming from high claim rates.
Mark Pitchford, COO of California Casualty Group, stated that the newly introduced Sustainable Insurance Strategy is intended to stabilize California’s homeowners’ insurance market. In light of this return, each of the five insurers has requested an average rate increase of 6.9%, which aligns with previous approvals under earlier insurance commissioners. Michael Soller from the DOI indicated that this rate increase is directly associated with a commitment from these insurers to remain and expand their coverage in California rather than withdraw from the market altogether.
Furthermore, Governor Gavin Newsom has called for a national approach to tackling issues surrounding insurance, expressing concern over homeowners’ insurance as a global challenge. He acknowledged during a livestreamed conversation that while the new guidelines might result in quicker rate hikes, they will ultimately contribute to a more stable market and enhance access for homeowners across the state.
With the new regulations, insurers now have the ability to utilize catastrophe modeling, which considers wildfire history and prevailing climate trends to assess risk with greater precision when developing their pricing strategies. These reforms are aimed at striking a balance between the long-term viability of insurance companies and the essential goal of making insurance coverage more accessible and affordable for California residents in wildfire-prone areas.
Key Features of the Return of Property Insurance Companies to California
| Feature | Details |
|---|---|
| Insurers Involved | Mercury, CSAA, USAA, Pacific Specialty, California Casualty |
| Regulation Updates | Effective considerations of catastrophe likelihood and reinsurance costs |
| Coverage Commitment | More extensive coverage in high wildfire-risk areas |
| Rate Increase | 6.9% increase requested by all five insurers |
| Market Goals | Stabilization of homeowners’ insurance market and improved access for residents |
FAQ
Five Major Property Insurance Companies Return to California
Which companies are returning to California’s homeowners’ insurance market?
What are the new insurance regulations in California?
What commitment have the insurers made regarding coverage?
Why are the new regulations being implemented?
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
- Wikipedia: General Information
Author: STAFF HERE LOS ANGELES WRITER
LOS ANGELES STAFF WRITER The LOS ANGELES STAFF WRITER represents the experienced team at HERELosAngeles.com, your go-to source for actionable local news and information in Los Angeles, Los Angeles County, and beyond, specializing in "news you can use" with coverage of 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 from years of dedicated reporting and strong community input, including local press releases and business updates, while delivering top reporting on high-value events like the Academy Awards, LA Auto Show, and Los Angeles Marathon, extending coverage to key organizations such as the Los Angeles Area Chamber of Commerce and the Los Angeles Tourism & Convention Board, plus leading businesses in entertainment and technology like Warner Bros. and SpaceX, and as part of the broader HERE network including HEREAnaheim.com , HERECostaMesa.com , HEREHuntingtonBeach.com , and HERESantaAna.com , providing comprehensive, credible insights into Southern California's dynamic landscape. HERE Anaheim HERE Beverly Hills HERE Coronado HERE Costa Mesa HERE Hollywood HERE Huntington Beach HERE Long Beach HERE Los Angeles HERE Mission Viejo HERE San Diego HERE Santa Ana
