Daily P&C Insurance News

The California Department of Insurance has approved an average 8.2% rate increase for auto policies from State Farm, Allstate, and GEICO, citing wildfire losses and repair cost inflation. Consumer advocates warn the hikes will disproportionately impact middle-income drivers in high-risk zones.

Farmers Insurance announced it will non-renew 72,000 homeowners policies across wildfire-prone regions, accelerating the state’s insurance crisis. The move follows similar exits by State Farm and Allstate, leaving FAIR Plan as the primary market for over 1.3 million California homes.

Reinsurers covering California P&C carriers are quoting 35-50% renewals for 2027 contracts after $12B in 2025 wildfire losses exhausted capacity. Primary insurers warn the hardening market could force 20% more premium increases passed to policyholders.

The “Palos Verdes Fire” destroyed 1,800 structures across LA County, generating $2.1B in insured losses primarily from homeowners and commercial policies. Adjusters report claims surge overwhelming carriers already strained by capacity shortages.

New legislation requires all California P&C insurers using AI/ML models to provide policyholders with explainable denial reasons and annual algorithmic audits. The law targets pricing discrimination uncovered in recent State Farm and Liberty Mutual investigations.