P&C Insurance Daily

Insurance Commissioner Ricardo Lara ordered insurers to preserve residential property insurance coverage for over 147,000 policyholders affected by the Gifford Fire, shielding those in 29 ZIP codes from non-renewal or cancellation for one year. Six major insurers, including Farmers, Mercury, CSAA, and USAA, have announced they are staying and growing in wildfire-affected areas under the Commissioner’s Sustainable Insurance Strategy.

SB 1076, introduced by state Sen. Sasha Renée Pérez, would require insurers to offer and renew coverage for homes meeting wildfire-safety standards starting January 1, 2028, with penalties for noncompliance. The insurance industry warns the mandate could force carriers from California’s already-strained market, while consumer advocates and fire survivors argue it prevents homeowners from being penalized for taking safety measures.

A new suite of California laws aimed at improving property insurance took effect January 1, primarily focusing on promoting wildfire safety and consumer protections with increased transparency and customer convenience. The legislation was passed in response to climate change accelerating natural disasters and making insurance more expensive and less available across the state.

2025 marked a decisive turning point in California’s property insurance landscape, with a sustained contraction in admitted carrier availability pushing more business into surplus lines. CSAA will raise rates for nearly 481,800 homeowners starting in March, while Mercury Insurance will implement rate increases averaging 6.9% for over 650,000 homeowners beginning in July.

California’s reinsurance costs have surged over the past decade with sharp increases from 2020 through 2023, while new regulatory rules now allow insurers to use forward-looking catastrophe models and pass through reinsurance costs directly into premiums. Homeowners who invest in risk reduction measures, defensible space improvements, and structural retrofits are likely to have more coverage options and better rates over time.