California, September 25, 2025
News Summary
Five major property insurance companies, including Mercury and USAA, are returning to California following new insurance regulations aimed at stabilizing the housing market. These regulations allow insurers to consider catastrophe likelihood and reinsurance costs, leading to a potential rate increase of 6.9%. The returning companies aim to expand coverage in high wildfire risk areas, addressing concerns around the California FAIR plan, which serves as a last resort for homeowners without access to private insurance.
California
Five major property insurance companies are set to return to California, as confirmed by the California Department of Insurance (DOI). This development follows updated insurance regulations implemented by Insurance Commissioner Ricardo Lara nine months ago, intended to stabilize the housing market after numerous insurers exited the state or dropped policies.
The five returning companies are Mercury, CSAA, USAA, Pacific Specialty, and California Casualty, which include three of California’s largest insurers. These companies are now subject to new regulations that permit them to consider factors such as catastrophe likelihood and reinsurance costs when establishing premiums.
As part of their return, these companies have pledged to offer more coverage in areas identified as high-risk for wildfires. State officials aim to decrease the reliance on the California FAIR plan, which serves as insurance of last resort for homeowners unable to procure private policies. The FAIR plan has faced challenges due to financial difficulties stemming from high claims.
Mark Pitchford, COO of California Casualty Group, highlighted that the Sustainable Insurance Strategy is designed to help stabilize the homeowners’ insurance market in California. Each of the five insurers has requested a rate increase of 6.9%, aligning with prior approvals from previous insurance commissioners.
According to Michael Soller from the DOI, this rate increase is linked to a commitment from insurers to remain in California and expand their coverage options, rather than drop policies altogether. Governor Gavin Newsom has stressed the importance of national leadership concerning insurance issues, classifying homeowners’ insurance as a significant global concern.
Newsom acknowledged that although the new regulations may prompt steeper rate increases, they are essential for fostering a more stable market and improving access for homeowners. The insurers now have the capability to use catastrophe modeling to evaluate risks more accurately by analyzing wildfire histories and climate trends in relation to rate determination.
California’s state reforms aim to create a balance between the long-term sustainability of insurance companies and the goal of ensuring that more residents in wildfire-prone areas can access affordable insurance coverage.
Key Information
- Returning Companies: Mercury, CSAA, USAA, Pacific Specialty, California Casualty
- New Regulations Implemented: Consideration of catastrophe likelihood and reinsurance costs in premium setting
- Rate Increase Requested: 6.9%
- Objective: Increase coverage in high wildfire risk areas and stabilize the homeowners’ insurance market
Background Context
The insurance landscape in California has been tumultuous in recent years, with several prominent insurers withdrawing from the market or rescinding policies due to unsustainable risk levels. The California FAIR plan, while serving as a stopgap for many homeowners, has struggled financially and highlights the need for effective reform in the property insurance sector.
The recent changes to insurance regulations by the California Department of Insurance represent a proactive approach by the state to rectify these issues and provide homeowners with better insurance options while ensuring the stability of insurance providers.
FAQ Section
What five property insurance companies are returning to California?
Mercury, CSAA, USAA, Pacific Specialty, and California Casualty are returning to California.
What are the new regulations for insurers in California?
The new regulations allow insurers to consider factors such as catastrophe likelihood and reinsurance costs when setting premiums.
What is the rate increase requested by the returning insurers?
All five insurers have requested a rate increase of 6.9%.
What is the goal of the state officials regarding the California FAIR plan?
State officials aim to reduce dependence on the California FAIR plan, which serves as insurance of last resort for those unable to secure private policies.
How will the new insurance regulations aid in homeowners’ coverage?
The new regulations are designed to stabilize the homeowners’ insurance market and will help ensure that more residents in wildfire-prone areas have access to affordable insurance coverage.
Chart: Key Features of the Returning Insurers
| Insurance Company | Rate Increase Requested | Focus Areas |
|---|---|---|
| Mercury | 6.9% | High wildfire risk regions |
| CSAA | 6.9% | High wildfire risk regions |
| USAA | 6.9% | High wildfire risk regions |
| Pacific Specialty | 6.9% | High wildfire risk regions |
| California Casualty | 6.9% | High wildfire risk regions |
Deeper Dive: News & Info About This Topic
- KCRA: Five Property Insurance Companies Returning to California
- Wikipedia: Insurance in the United States
- CBS News: California’s Insurance Companies Commitment
- Google Search: California insurance reforms
- Fox40: Five Property Insurers Return to California
- Encyclopedia Britannica: Insurance
- PR Newswire: California Insurance Company Weighs Options
- Google News: California property insurance
- State Farm: Understanding Issues in California
- Patch: OC Couple Tried to Scam $10K from Insurance Companies
Author: Anaheim Staff Writer
Anaheim Staff Writer The Anaheim Staff Writer represents the experienced team at HEREAnaheim.com, your go-to source for actionable local news and information in Anaheim, 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 major conventions at the Anaheim Convention Center, including NAMM and VidCon, exciting games at Angel Stadium and Honda Center, and developments at Disneyland Resort Our coverage extends to key organizations like the Anaheim Chamber of Commerce and Visit Anaheim, plus leading businesses in hospitality, entertainment, and innovation that power the local economy As part of the broader HERE network, including HERECostaMesa.com, HEREHuntingtonBeach.com, HERESantaAna.com, and HERELosAngeles.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.
