California, September 25, 2025
News Summary
California’s homeowners’ insurance market sees the return of five major insurers—Mercury, CSAA, USAA, Pacific Specialty, and California Casualty—due to updated regulations. These changes aim to stabilize the market, enhance coverage in wildfire-risk areas, and reduce reliance on the California FAIR plan. The insurers plan a 6.9% rate increase to align with their commitments, reflecting a proactive approach to risk management amid rising wildfire threats.
California is welcoming back five major property insurance companies, marking a significant shift in the state’s homeowners’ insurance landscape. The California Department of Insurance (DOI) confirmed that the companies are set to re-enter the market following updated insurance regulations implemented by Insurance Commissioner Ricardo Lara nine months ago. These changes sparked a wave of exits and policy drops by various insurers previously operating in the state.
The five returning companies—Mercury, CSAA, USAA, Pacific Specialty, and California Casualty—include three of the largest insurers in California. This development signals a potential restoration of stability in a market that has been challenged by rising wildfire risks and public concerns over the availability of adequate coverage.
The new regulations allow insurers to better account for factors like the likelihood of catastrophic events and the costs associated with reinsurance when establishing premiums. In their agreement to return, the five companies committed to enhancing coverage in areas at elevated risk of wildfires, marking a proactive approach to disaster recovery and risk management.
California officials are eager to decrease the state’s reliance on the California FAIR plan, an insurance solution of last resort for individuals unable to find private policies. The FAIR plan faces significant financial challenges stemming from high claim volumes, making it essential for the market to rebalance through the re-entry of these major insurers.
Mark Pitchford, the COO of California Casualty Group, emphasized that the implementation of the Sustainable Insurance Strategy aims to stabilize the homeowners’ insurance market. All five returning insurers have requested a rate increase of 6.9%, a figure consistent with approvals granted under previous insurance commissioners. This increment is expected to align with the commitment from the insurers to maintain and expand their presence in California instead of withdrawing from it.
Michael Soller from the DOI explained that the rate increase is closely tied to this commitment, reinforcing the insurers’ intent to offer more extensive coverage options to homeowners, particularly in wildfire-prone regions. Governor Gavin Newsom has underscored the necessity for national leadership concerning insurance issues during discussions at the Clinton Global Initiative, articulating the importance of homeowner insurance as a pressing global concern.
While acknowledging that the new regulations could lead to more rapid premium increases for consumers, Governor Newsom asserted that these measures aim to cultivate a more robust insurance market and enhance homeowners’ access to coverage. Insurers are now allowed to utilize catastrophe modeling, which evaluates wildfire history and climate trends, to assess risk more accurately when determining rates.
Efforts by state reformers aim to strike a balance between the long-term sustainability of insurance companies and ensuring that residents in wildfire-affected areas have access to affordable insurance options. With the return of these five insurers and the newly established regulations, stakeholders remain hopeful for meaningful improvements in coverage and overall market stability.
FAQ
Which companies are returning to California’s property insurance market?
Five property insurance companies are planning their return to California: Mercury, CSAA, USAA, Pacific Specialty, and California Casualty.
What prompted the return of these companies?
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 changes do the new regulations allow for insurers?
The new regulations allow insurers to consider factors such as catastrophe likelihood and reinsurance costs when setting premiums.
How will these companies address high wildfire risk areas?
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 California FAIR plan?
The California FAIR plan serves as insurance of last resort for those unable to secure private policies and has faced financial difficulties due to high claims.
What is the planned rate increase for each insurer?
All five insurers have requested a rate increase of 6.9%, a figure consistent with previous approvals under past insurance commissioners.
Key Features of the Returning Insurers
| Company Name | Market Presence | Rate Increase Requested | Coverage Commitment |
|---|---|---|---|
| Mercury | One of California’s largest insurers | 6.9% | Enhanced coverage in wildfire risk areas |
| CSAA | Major insurer in the state | 6.9% | Enhanced coverage in wildfire risk areas |
| USAA | Significant share of the market | 6.9% | Enhanced coverage in wildfire risk areas |
| Pacific Specialty | Respected insurer | 6.9% | Enhanced coverage in wildfire risk areas |
| California Casualty | Key player in the market | 6.9% | Enhanced coverage in wildfire risk areas |
Deeper Dive: News & Info About This Topic
- KCRA: California Welcomes Back Property Insurance Companies
- Wikipedia: Homeowners’ Insurance
- CBS News: Five Insurance Companies Commitment in California
- Google Search: California Insurance Regulations
- Fox40: Five Property Insurers Return to California
- Google Scholar: California Property Insurance Market
- CBS News Video: 5 Insurance Companies Returning to California
- Encyclopedia Britannica: Insurance
- PR Newswire: California Insurance Company Weighs Options
- Google News: California Insurance News
Author: STAFF HERE HOLLYWOOD
The Hollywood Staff Writer represents the experienced team at HEREHollywood.com, your go-to source for actionable local news and information in Hollywood, 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 Hollywood Bowl summer concerts, the Hollywood Christmas Parade, film premieres at TCL Chinese Theatre, and festivals at the Magic Castle. Our coverage extends to key organizations like the Hollywood Chamber of Commerce and Visit Hollywood, plus leading businesses in entertainment, dining, and tourism that define the local economy. As part of the broader HERE network, including HERELosAngeles.com, HEREBeverlyHills.com, HEREAnaheim.com, and HEREHuntingtonBeach.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.
