Two of California’s major home insurers set to raise rates

6:30 P.M. WELL, TWO OF CALIFORNIA’S HOME INSURERS ARE RAISING THEIR RATES THIS YEAR. THE RATE HIKES ARE PART OF THE INSURANCE DEPARTMENT’S YEAR OLD SUSTAINABLE INSURANCE STRATEGY. THIS IS A SET OF REFORMS THAT WAS DESIGNED TO IMPROVE THE HOME INSURANCE CRISIS. INSURERS CAN RAISE THEIR RATES, BUT THEY HAVE TO WRITE MORE POLICIES IN AREAS WHERE IT’S BECOME VERY HARD FOR PEOPLE TO GET INSURANCE. CSAA AND MERCURY INSURANCE JUST GOT PERMISSION TO INCREASE THEIR RATES THIS YEAR. IN MARCH, CSAA WILL RAISE THEIR RATES FOR MORE THAN 481,000 HOMEOWNERS. THEY ARE THE TRIPLE A AFFILIATED INSURANCE FOR NORTHERN AND CENTRAL CALIFORNIA. AND IN JULY, MERCURY INSURANCE WILL RAISE THEIR RATES FOR 650,000 CUSTOMERS. MERCURY INSURANCE IS THE THIRD LARGEST HOME INSURER IN THE STATE. WELL, LET’S TALK RIGHT NOW WITH MEGAN FAN. MUNTZ. IS IT MUNTZ OR MUNCIE? IT’S MUNTZ. YOU PRONOUNCE IT PERFECTLY. OKAY. JUST WANT TO MAKE SURE. ANYWAY, YOU’RE WITH THE SAN FRANCISCO CHRONICLE JOINING US RIGHT NOW. GREAT TO HAVE YOU. AND BY THE WAY, YOU CAN CHECK OUT HER ARTICLE BY SCANNING THE QR CODE THERE ON YOUR SCREEN. SO FIRST UP, MEGAN, WHY LET’S TALK ABOUT WHY THEY’RE RAISING RATES, ESPECIALLY FOR AREAS THAT ARE NOT AT ANY PARTICULAR RISK OF FLOODING OR WILDFIRES. YEAH. SO BOTH OF THESE COMPANIES HAVE TOLD US THAT THE REASON THEY’RE SEEKING THESE RATE INCREASES IS BOTH DUE TO INFLATION AND KEEPING UP WITH THE COSTS ASSOCIATED WITH INFLATION, BUT ALSO DUE TO WILDFIRE RISK. IF YOU LOOK AT A MAP AVAILABLE ON OUR SITE ABOUT WHERE THESE RATE INCREASES WILL HIT THE HARDEST FOR CSAA, IT’S LARGELY A UNIFORM INCREASE ACROSS THE STATE. BUT WHEN YOU LOOK AT THE INCREASES FOR MERCURY INSURANCE, YOU CAN REALLY SEE WILDFIRE PRONE PARTS OF THE STATE LIKE LOS ANGELES COUNTY AND THE FOOTHILLS STANDOUT. AND WE SHOULD MENTION YOU HAVE A GREAT MAP. YOU CAN JUST GO ALL THE WAY THROUGH, CLICK ON EVERY SINGLE ZIP CODE AND REALLY SEE EXACTLY WHAT THOSE NUMBERS LOOK LIKE. DO YOU EXPECT THAT OTHER MAJOR INSURANCE COMPANIES WILL FOLLOW SUIT? WILL THEY ALL BE RAISING THEIR RATES? WE KNOW FROM EXPERTS THAT THESE REFORMS, PUSHED BY THE DEPARTMENT OF INSURANCE, ARE WIDELY EXPECTED TO LEAD TO RATE INCREASES, BUT WE ACTUALLY HAVEN’T SEEN THAT MANY COMPANIES START FILING ALREADY. WHAT’S IN THE WORKS RIGHT NOW IS THAT FARMERS INSURANCE, WHICH IS THE SECOND LARGEST INSURANCE COMPANY IN THE STATE, AS WELL AS USAA, WHICH IS ANOTHER ONE OF OUR MAJOR INSURERS, ARE BOTH PURSUING 6.9% INCREASES. IDENTICAL TO WHAT CSAA AND MERCURY JUST GOT APPROVED FOR. SO WE’LL HAVE TO SEE WHAT THE DEPARTMENT DOES WITH THOSE INCREASES AND WHAT INSURANCE COMPANIES DO IN THE FUTURE. BUT A BIG ONE THAT’S STILL ON THE HORIZON FOR US THIS YEAR IS WHETHER STATE FARM MIGHT GET PERMISSION TO IMPLEMENT ITS FULL 30% RATE INCREASE, WHICH WOULD BE AMONG THE LARGEST WE’VE SEEN IN THE PAST COUPLE OF YEARS. YEAH, THAT WOULD HIT SOME PEOPLE REALLY HARD. YOU’RE TALKING ABOUT ZIP CODES AND THE MAP THAT YOU CAN USE. AND IN THOSE ZIP CODES AROUND DOWNTOWN SACRAMENTO, YOU START CLICKING ON THEM. YOU NOTICE RATES ARE GOING UP FOR HOMEOWNERS, BUT THEY’RE ACTUALLY GOING DOWN FOR RENTERS AND CONDOS. SO WHY ARE THE INSURANCE COMPANIES APPARENTLY SEEING HOMEOWNERS AS A BIGGER RISK THAN OTHER RENTERS IN THE SAME NEIGHBORHOOD? YEAH, WELL, IT’S AN INTERESTING MARKET. YOU KNOW, RENTERS INSURANCE WHEN YOU’RE A RENTER ONLY COVERS THE CONTENTS OF YOUR HOME. AND YOUR LANDLORD TYPICALLY GETS A DIFFERENT TYPE OF POLICY. NOW, CONDOS IS PRETTY INTERESTING BECAUSE WE’VE ACTUALLY SEEN A LOT OF DIFFICULTY IN THE CONDO MARKET. FARMERS INSURANCE, FOR EXAMPLE, HAD STOPPED WRITING CONDO INSURANCE FOR A LONG TIME, AND OTHER SUBSIDIARIES OF MAJOR INSURERS HAD STOPPED OFFERING CONDO INSURANCE AS WELL. BUT HERE WE SEE MERCURY COMING IN AND LOWERING THEIR RATES FOR CONDO CUSTOMERS, WHICH COULD BE A SIGN OF RELIEF IN THIS DIFFICULT MARKET. SO SPEAKING OF THE RELIEF WITH THIS, AS WE MENTIONED, THESE RATE INCREASES WERE APPROVED IN ORDER TO CONVINCE INSURANCE COMPANIES TO WRITE POLICIES FOR MORE CALIFORNIANS. THE RATES ARE NOW GOING UP. WILL THAT ACTUALLY HAPPEN? WILL MORE PEOPLE GET INSURANCE? HERE’S WHAT WE KNOW FROM THE FILINGS THAT WE’VE SEEN SO FAR. SO MERCURY INSURANCE UNDER THESE REGULATIONS IS GOING TO PROMISE TO WRITE 2000 MORE POLICIES BY 2028, WHICH IS A SMALL SHARE OF THE POLICIES IT HAS OVERALL. AND THE 8 MILLION INSURED HOMES IN THE STATE. UNDER THESE REFORMS, CSAA ACTUALLY ALREADY WRITES ENOUGH POLICIES AND WHAT THE DEPARTMENT CALLS DISTRESSED AREAS WHERE INSURANCE IS EXPENSIVE AND HARD TO FIND, AND A LOT OF HOMEOWNERS ARE ON THE FAIR PLAN. BUT THEY ACTUALLY TOLD ME TODAY THAT THEY’RE MAKING A PLEDGE TO WRITE NEW POLICIES ANYWAYS, AND THAT THEY’RE GOING TO LOOK TO TAKE ABOUT 1000 PEOPLE OFF OF THE FAIR PLAN IN THE NEXT FEW YEARS IN ORDER TO HELP STEM THE INSURANCE CRISIS. NOW, CONSUMER ADVOCATES SAY THAT THIS IS JUST A SMALL BITE OF THE MARKET AND ISN’T GOING TO MAKE A DENT IN THE MORE THAN 600,000 PEOPLE NOW WHO SIGN UP FOR THE CALIFORNIA FAIR PLAN. BUT SOME PEOPLE ON THE INDUSTRY SIDE SAY THAT IT’S TENTATIVE SIGNS OF PROGRESS WHEN BEFORE THIS, MANY INSURANCE COMPANIES WERE WRITING NEW POLICIES AT ALL. YEAH, IT’S BEEN HORRIBLE. SOME GOOD INFORMATION THERE. WELL, SO IF YOU GET, YOU KNOW, A NOTICE THAT YOUR INSURANCE COSTS ARE GOING UP. YOU KNOW, SOME PEOPLE ARE COMFORTABLE WHERE YOU’VE GOT YOUR HOMEOWNER’S INSURANCE, YOUR AUTO INSURANCE, EVERYTHING UNDER ONE UMBRELLA. I MEAN, IS IT WORTH IT TO SHOP AROUND, OR ARE YOU GOING TO FIND PRETTY MUCH EVERYONE’S RAISING THE RATES? YEAH. YOU KNOW, I THINK RIGHT NOW WE’RE NOT IN AN ENVIRONMENT WHERE ANYONE’S LIKELY TO SEE A RATE DECREASE ANYTIME SOON. BUT ONE THING THAT BOTH OF THESE COMPANIES HAVE SAID TO OFFSET THESE RATE INCREASES IS THAT THEY’RE EXPANDING THE AMOUNT OF DISCOUNTS THEY’LL GIVE TO HOMEOWNERS WHO REDUCE THEIR WILDFIRE RISK. SO IF YOU TAKE MEASURES LIKE CLOSING YOUR EAVES, CLEARING OUT DEFENSIBLE SPACE, OR SWAPPING OUT YOUR DECK, MAYBE FOR ONE THAT’S MADE OUT OF NONCOMBUSTIBLE MATERIAL, YOU CAN QUALIFY FOR A PRETTY HEFTY DISCOUNT ON YOUR PREMIUM. CONSUMER ADVOCATES SAY THERE’S OTHER THINGS THAT YOU CAN LOOK INTO AS WELL. MAYBE INCREASING YOUR DEDUCTIBLE OR LOOKING AT WHETHER YOU NEED TO ALTER YOUR COVERAGES IN DIFFERENT AMOUNTS SO THAT YOU CAN WORK WITH MAKING SURE THAT YOUR PREMIUM IS STILL AFFORDABLE, BUT YOU’RE STILL PROTECTED IN THE EVENT OF A CATASTROPHE LIKE A WILDFIRE. ALL RIGHT, MEGAN, THANK YOU. GREAT REPORTING. THIS IS SO IMPORTANT AND SO PERSONAL FOR SO MANY PEOPLE

Two of California’s major home insurers set to raise rates this year

Updated: 2:46 PM PST Jan 14, 2026

Editorial Standards ⓘ

Two major home insurance companies in California are set to raise their rates this year. The rate hikes are part of the California Department of Insurance’s Sustainable Insurance Strategy, which aims to stabilize the state’s stressed insurance market. Under the strategy, insurers can raise their rates, but they have to write more policies in areas where it’s more difficult for residents to get insurance. Leer en español.In March, CSAA, the AAA-affiliated insurance for Northern and Central California, is set to raise its rates for more than 481,000 homeowners. In July, Mercury Insurance, California’s third-largest home insurer, is set to raise its rates for around 650,000 customers. Megan Fan Munce, of the San Francisco Chronicle, joined KCRA 3 on Tuesday to discuss the rate hikes. The Chronicle mapped out the areas affected by the rate increases. “Both of these companies have told us that the reason they are seeking these rate increases is both due to inflation and keeping up with the cost associated with inflation, but also due to the wildfire risk,” Fan Munce said. Fan Munce noted that other rate increases could be on the horizon from other companies. “Farmers Insurance, which is the second-largest insurance company in the state, as well as USAA, which is another one of our major insurers, are both pursuing 6.9% increases identical to what CSAA and Mercury just got approved for,” Fan Munce said. “A big one that’s still on the horizon for us this year is whether State Farm might get permission to implement its full 30% rate increase, which would be among the largest we’ve seen the past couple of years.”Watch the full interview with Fan Munce in the video player above.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

Two major home insurance companies in California are set to raise their rates this year.

The rate hikes are part of the California Department of Insurance’s Sustainable Insurance Strategy, which aims to stabilize the state’s stressed insurance market. Under the strategy, insurers can raise their rates, but they have to write more policies in areas where it’s more difficult for residents to get insurance.

Leer en español.

In March, CSAA, the AAA-affiliated insurance for Northern and Central California, is set to raise its rates for more than 481,000 homeowners.

In July, Mercury Insurance, California’s third-largest home insurer, is set to raise its rates for around 650,000 customers.

Megan Fan Munce, of the San Francisco Chronicle, joined KCRA 3 on Tuesday to discuss the rate hikes. The Chronicle mapped out the areas affected by the rate increases.

“Both of these companies have told us that the reason they are seeking these rate increases is both due to inflation and keeping up with the cost associated with inflation, but also due to the wildfire risk,” Fan Munce said.

Fan Munce noted that other rate increases could be on the horizon from other companies.

“Farmers Insurance, which is the second-largest insurance company in the state, as well as USAA, which is another one of our major insurers, are both pursuing 6.9% increases identical to what CSAA and Mercury just got approved for,” Fan Munce said. “A big one that’s still on the horizon for us this year is whether State Farm might get permission to implement its full 30% rate increase, which would be among the largest we’ve seen the past couple of years.”

Watch the full interview with Fan Munce in the video player above.

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