Daily P&C Insurance News

The California Department of Insurance has approved an average 8.2% rate hike for personal auto policies from State Farm and Allstate, citing increased repair costs and wildfire-related claims. Consumer advocates warn the increase will disproportionately impact lower-income drivers in high-risk areas.

State Farm has non-renewed another 1,200 homeowners policies in California’s high wildfire risk areas, bringing their total withdrawals to over 72,000 since 2023. The carrier cites unsustainable losses from recent catastrophe seasons as the primary reason for the market contraction.

Major reinsurance firms are signaling significantly reduced capacity and 25%+ rate increases for California property business at the mid-year renewals. The hardening market reflects continued wildfire losses and regulatory uncertainty surrounding admitted carrier capacity.

Governor Newsom signed AB-1234 requiring insurers to disclose AI usage in personal lines underwriting and provide consumers with explainable denial reasons. The law aims to prevent algorithmic discrimination while carriers warn of increased compliance costs being passed to policyholders.

NOAA’s seasonal outlook forecasts 20% above-normal wildfire activity across California with potential insured losses exceeding $15 billion. Carriers are activating catastrophe response teams early while FAIR Plan assessments loom for 1.2 million high-risk property owners.