Daily P&C Insurance News

The California Department of Insurance has approved an average 8.5% rate increase for personal auto policies from State Farm and Allstate, citing increased repair costs and litigation expenses. This marks the second consecutive year of double-digit increases as insurers grapple with the state’s volatile market conditions.

California saw 15% more homeowners insurance policy non-renewals in Q1 2026 compared to last year, with State Farm dropping 30,000 additional policies. The FAIR Plan now covers over 1.2 million high-risk homes as private carriers continue their market exit.

Recent Los Angeles area wildfires have generated $2.8 billion in insured losses, primarily property damage across 45,000 structures. Reinsurers are signaling 25-35% rate increases for California wildfire exposure at the upcoming renewals.

Insurance Commissioner Ricardo Lara announced regulations requiring insurers to offer up to 20% premium credits for homeowners completing certified wildfire mitigation programs. The proposal aims to reduce $15 billion in annual wildfire losses while incentivizing property hardening.

New legislation requires all California insurers using AI/ML models in underwriting to provide policyholders with explainable decision rationales by January 2027. The law targets discrimination concerns while preserving innovation in a market where 72% of carriers use AI for risk assessment.