Daily California P&C Insurance News

Wildfires

Wildfires

One year after the 2025 Los Angeles wildfires, Morningstar DBS Research describes the event as a significant stress test for California’s property/casualty insurance sector, noting industry resilience amid regulatory reforms like rate increases. However, the sector remains vulnerable due to growing California FAIR Plan exposure reaching $696 billion and insurers like State Farm facing weakened positions after massive losses.

Wildfire Claims Delays Persist

Wildfires

One year after the deadly Eaton and Palisades fires in southern California, numerous survivors continue to encounter problems with their insurance claims. This highlights ongoing challenges in claim processing for wildfire victims amid the state’s insurance market strains.

Home Insurance

Home Insurance

Southern California’s extremely wet November raises concerns about flooding and mudslides, potentially driving reinsurance costs and leading to higher home insurance premiums in 2026 despite some global softening trends. Homeowners in high-risk wildfire and flood areas may face rate hikes up to 30%, stricter underwriting, and more non-renewals as insurers adjust to elevated risks.

Regulatory Reform

Regulatory Reform

Governor Gavin Newsom has issued an executive order directing state agencies to accelerate solutions for California’s homeowners insurance crisis, focusing on market stability and natural disaster mitigation. Insurance Commissioner Ricardo Lara supports the move, noting commitments from five major insurers to expand coverage in the state under a Sustainable Insurance Strategy.

Reinsurance & Market Outlook

Reinsurance

Fitch Ratings anticipates U.S. property/casualty results in 2026 to resemble 2024, with California wildfires contributing $40 billion in losses despite ample reinsurance capacity leading to softening rates. Rate hikes and underwriting improvements should bolster homeowners insurer profitability even with expected hurricane activity returning to normal levels.