The California Department of Insurance confirmed to CBS Sacramento that Mercury Insurance, CSAA, USAA, Pacific Specialty, and California Casualty all announced plans to "stay and grow in the state." Together, they represent three of California's top seven largest homeowners' insurance providers.
In conversation with Bill Clinton at a livestreamed Clinton Global Initiative event on Wednesday, Gov. Gavin Newsom announced that state reforms, like addressing reinsurance, enticed the companies to come back. "We had to address the capital needs of these companies and we also had to address the fact that California, and you wouldn't know this, is among the most affordable insurance markets in the country because the voters initiated a framework on regulation that denied significant rate increases," Newsom said during the discussion focused on climate issues. Newsom called insurance one of the most pressing global issues as it relates to climate change. The state's reforms are called the Sustainable Insurance Strategy, touted by Newsom during the conversation.
All five companies have also requested rate changes of 6.9%, a figure the Department of Insurance spokesperson says matches thousands of increases approved under past commissioners, outlined in a statement shared with CBS Sacramento on Wednesday, confirming the insurer's decisions.
"This is a far cry from what has happened in the past, when insurance companies increased their rates and dropped policies. Under Commissioner Lara's Sustainable Insurance Strategy, we are seeing initial signs of market improvement despite the devastating L.A. wildfires," said Michael Soller, a department spokesperson, in a statement.
For now, homeowners may still face higher rates, but state leaders argue the reforms offer accessibility.
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