Daily P&C Insurance News
California Edition

The California Department of Insurance has approved average 15% rate hikes for State Farm and Allstate, citing unprecedented repair costs and litigation expenses driven by California’s unique legal environment. The approval comes after two years of denied requests totaling over $3 billion in premium needs.

Early estimates peg insured losses from the Kings Canyon Fire complex at $12.4 billion, marking the costliest California wildfire event since 2020. Major carriers have accelerated non-renewal notices in high-risk zones, prompting emergency legislative discussions on catastrophe modeling reforms.

Farmers Insurance announced it will not renew 30,000 homeowners policies across wildfire-prone regions, representing 8% of its California book. The move follows similar retreats by AAA and GEICO, intensifying the state’s property insurance capacity crisis.

New emergency regulations require all insurers using AI/ML models for P&C underwriting to disclose algorithmic decision factors and submit annual bias audits. The CDI will impose fines up to $5 million for violations, targeting perceived discrimination in California’s diverse markets.

The California FAIR Plan announced plans to secure $2.5 billion in private reinsurance capacity at upcoming renewals, as its surplus dropped to $112 million amid 250% policy growth. Industry analysts warn of potential assessments on all California P&C policyholders if catastrophe losses materialize.