Several homeowners insurance companies that had either left the state or limited policies are coming back or committing to staying in California’s market, Gov. Gavin Newsom and the California Department of insurance said on Wednesday. The development comes about nine months after Insurance Commissioner Ricardo Lara and the department overhauled California’s insurance regulations after several companies had either dropped policies or limited them in the state. KCRA 3 was the first to report the update on Wednesday, after Gov. Newsom appeared to tell Bill Clinton at the Clinton Global Initiative that a handful of companies were coming back to the state. Newsom made the remarks in New York after Clinton asked Newsom what he thought should be done about the situation, which Newsom called one of the most pressing global issues. “We just had four of our admitted market come back,” Newsom told Clinton. “In the last two days or so we had our fourth come back in. We had a lot of folks who were leaving the market, they simply said it was too expensive and the losses are too significant.”Following the remarks, KCRA 3 asked the California Department of Insurance to confirm. A spokesman for the department said the governor’s remarks were accurate and provided a list of the companies that were committing to staying in California. The spokesman noted the list includes three of the state’s largest insurers. The five companies listed are Mercury, CSAA, USAA, Pacific Specialty and California Casualty. After this story first published Wednesday, both USAA and Mercury clarified in separate statements to KCRA 3 the company never stopped writing coverage in the state. A spokesman for Mercury would not say if the state leaders mischaracterized the situation but said they had “simplified” it.The new rules that lured the companies to return or do more business in the state allow insurance companies to consider new factors when they set premiums, including the likelihood of a catastrophe and the cost insurance companies pay to insure themselves, also known as reinsurance. In exchange, the companies have promised to provide more coverage in high-wildfire risk parts of California. State leaders have also been pushing to bring companies back into the market to reduce the number of properties relying on California’s FAIR plan, the state’s insurance of last resort. The plan provides insurance to those who can’t get private insurance and has been facing significant financial challenges as it takes on more claims. “The Sustainable Insurance Strategy helps restore stability and access to California’s homeowners insurance market,” said Mark Pitchford, the Chief Operating Officer at California Casualty Group in a press release Wednesday. “We appreciate all the work being done by the Commissioner and the Department to make coverage more accessible to homeowners across the state.”All five insurers have requested rate increases of 6.9%, according to Michael Soller, a spokesman for the California Department of Insurance. Soller noted the rate increase is identical to thousands approved under past insurance commissioners, but with a promise to remain and grow in the state. “This is a far cry from what has happened in the past, when insurance companies increased their rates and dropped policies,” Soller told KCRA 3 in an email. “Under Commissioner Lara’s Sustainable Insurance Strategy, we are seeing initial signs of market improvement despite the devastating L.A. wildfires. We won’t declare victory prematurely. We will thoroughly review companies’ rate filings to make sure consumers do not pay more than is required.” Speaking with Clinton, the governor acknowledged the new rules will allow for more rapid rate increases.”I think this issue requires leadership at the national level, it is under resourced, under focused. It’s a challenge for me, a challenge for Ron DeSantis, for governors in most states but it’s not top of mind and I think we need to be more focused on it,” Newsom said. See more coverage of top California stories here | Download our app | Subscribe to our morning newsletter | Find us on YouTube here and subscribe to our channel
Several homeowners insurance companies that had either left the state or limited policies are coming back or committing to staying in California’s market, Gov. Gavin Newsom and the California Department of insurance said on Wednesday.
The development comes about nine months after Insurance Commissioner Ricardo Lara and the department overhauled California’s insurance regulations after several companies had either dropped policies or limited them in the state.
KCRA 3 was the first to report the update on Wednesday, after Gov. Newsom appeared to tell Bill Clinton at the Clinton Global Initiative that a handful of companies were coming back to the state. Newsom made the remarks in New York after Clinton asked Newsom what he thought should be done about the situation, which Newsom called one of the most pressing global issues.
“We just had four of our admitted market come back,” Newsom told Clinton. “In the last two days or so we had our fourth come back in. We had a lot of folks who were leaving the market, they simply said it was too expensive and the losses are too significant.”
Following the remarks, KCRA 3 asked the California Department of Insurance to confirm. A spokesman for the department said the governor’s remarks were accurate and provided a list of the companies that were committing to staying in California. The spokesman noted the list includes three of the state’s largest insurers. The five companies listed are Mercury, CSAA, USAA, Pacific Specialty and California Casualty.
After this story first published Wednesday, both USAA and Mercury clarified in separate statements to KCRA 3 the company never stopped writing coverage in the state.
A spokesman for Mercury would not say if the state leaders mischaracterized the situation but said they had “simplified” it.
The new rules that lured the companies to return or do more business in the state allow insurance companies to consider new factors when they set premiums, including the likelihood of a catastrophe and the cost insurance companies pay to insure themselves, also known as reinsurance. In exchange, the companies have promised to provide more coverage in high-wildfire risk parts of California.
State leaders have also been pushing to bring companies back into the market to reduce the number of properties relying on California’s FAIR plan, the state’s insurance of last resort. The plan provides insurance to those who can’t get private insurance and has been facing significant financial challenges as it takes on more claims.
“The Sustainable Insurance Strategy helps restore stability and access to California’s homeowners insurance market,” said Mark Pitchford, the Chief Operating Officer at California Casualty Group in a press release Wednesday. “We appreciate all the work being done by the Commissioner and the Department to make coverage more accessible to homeowners across the state.”
All five insurers have requested rate increases of 6.9%, according to Michael Soller, a spokesman for the California Department of Insurance. Soller noted the rate increase is identical to thousands approved under past insurance commissioners, but with a promise to remain and grow in the state.
“This is a far cry from what has happened in the past, when insurance companies increased their rates and dropped policies,” Soller told KCRA 3 in an email. “Under Commissioner Lara’s Sustainable Insurance Strategy, we are seeing initial signs of market improvement despite the devastating L.A. wildfires. We won’t declare victory prematurely. We will thoroughly review companies’ rate filings to make sure consumers do not pay more than is required.”
Speaking with Clinton, the governor acknowledged the new rules will allow for more rapid rate increases.
“I think this issue requires leadership at the national level, it is under resourced, under focused. It’s a challenge for me, a challenge for Ron DeSantis, for governors in most states but it’s not top of mind and I think we need to be more focused on it,” Newsom said.
See more coverage of top California stories here | Download our app | Subscribe to our morning newsletter | Find us on YouTube here and subscribe to our channel

