California, September 25, 2025
News Summary
Five prominent property insurance companies, including Mercury and CSAA, are set to return to California following updated regulations aimed at improving market stability. This move is part of a strategy to enhance coverage options for homeowners, particularly in wildfire-prone regions. The new regulations allow insurers to consider various factors, such as the likelihood of catastrophes, when setting premiums. As part of their agreement, these companies have pledged to provide better coverage and have requested a 6.9% rate increase to ensure sustainability in the market.
California – Five major property insurance companies are set to return to California, according to confirmation from the California Department of Insurance (DOI). This announcement follows the implementation of updated insurance regulations by Insurance Commissioner Ricardo Lara, which were instituted nine months ago in response to a significant number of insurers exiting the market or dropping policies altogether.
The five insurers returning to California include Mercury, CSAA, USAA, Pacific Specialty, and California Casualty. Among them, three are recognized as some of the largest insurers in the state. The new regulations, pivotal to this shift, permit insurers to take into account various factors like the likelihood of catastrophes and reinsurance costs when determining insurance premiums.
As part of their agreement to return, these companies have pledged to enhance coverage options for homeowners in regions susceptible to high wildfire risks. This move is a strategic effort by state officials to diminish California’s reliance on the FAIR plan—the state’s insurance program designed to serve those who are unable to obtain private policies, which has recently struggled financially due to escalating claims.
Mark Pitchford, COO of California Casualty Group, has asserted that the Sustainable Insurance Strategy will aid in stabilizing the homeowners’ insurance market across California. In addition, all five insurers have submitted requests for a rate increase of 6.9%. This figure aligns with prior rate hikes approved under past insurance commissioners and is viewed as a necessary measure for insurers aiming to remain in the state.
Michael Soller from the DOI highlighted that this rate increase is associated with a commitment from the insurers to not only stay but also expand their operations in California instead of withdrawing from the market. In a related discussion about the future of homeowners’ insurance, Governor Gavin Newsom emphasized the importance of national leadership on these pressing insurance issues, recognizing that homeowners’ insurance is a global concern.
While Governor Newsom acknowledged that the new regulations may lead to more immediate rate increases, he also pointed out that they are integral to fostering a more stable insurance market, ultimately improving access for homeowners. The revised rules now allow insurers to use catastrophe modeling, which analyzes historical wildfire patterns and climate trends, to more accurately assess risks when determining rates.
California’s recent reforms focus on balancing the long-term viability of insurance companies with the aim of providing more residents in wildfire-prone areas access to affordable insurance coverage. The return of these five companies is anticipated to bring positive changes to a beleaguered insurance landscape, potentially paving the way for increased stability and support for California homeowners.
FAQ Section
Frequently Asked Questions
Which insurance companies are returning to California?
The five returning companies are Mercury, CSAA, USAA, Pacific Specialty, and California Casualty.
What prompted these companies to return to California?
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 are the new regulations related to insurance premiums?
The new regulations allow insurers to consider factors such as catastrophe likelihood and reinsurance costs when setting premiums.
What commitments have the returning insurers made regarding wildfire coverage?
The companies have committed to providing more coverage in areas of high wildfire risk as part of their agreement to return.
How does the state plan to balance insurance sustainability and affordability?
State reforms aim to balance the long-term sustainability of insurance companies with the goal of ensuring that more residents in wildfire-prone areas can access affordable insurance coverage.
Deeper Dive: News & Info About This Topic
- KCRA: Five Property Insurance Companies Returning to California
- Wikipedia: Insurance in the United States
- CBS News: Five Insurance Companies Commitment in California
- Google Search: California Insurance Companies Return
- Fox40: Five Property Insurers Return to California
- Encyclopedia Britannica: Insurance
- CBS News: What’s Bringing Insurers Back to California?
- Google News: California Insurance News
- PR Newswire: California Insurance Company Options
- San Francisco Chronicle: California Home Insurance Tool
Author: STAFF HERE BEVERLY HILLS WRITER
The Beverly Hills Staff Writer represents the experienced team at HEREBeverlyHills.com, your go-to source for actionable local news and information in Beverly Hills, Los Angeles 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 Rodeo Drive Concours d'Elegance, the Beverly Hills artSHOW, Concerts on Canon, and holiday celebrations throughout the city. Our coverage extends to key organizations like the Beverly Hills Chamber of Commerce and Visit Beverly Hills, plus leading businesses in luxury fashion, hospitality, and entertainment that drive the local economy. As part of the broader HERE network, including HERELosAngeles.com, HERESantaAna.com, HEREHuntingtonBeach.com, and HERECostaMesa.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.
