The California Department of Insurance has implemented reforms to the homeowner’s insurance market, allowing insurers to incorporate advanced catastrophe modeling and reinsurance costs into rate requests. While several carriers have opted in to the program, many remain cautious and are taking a wait-and-see approach over the next 12 months before reopening their admitted property programs. Many admitted carriers are also passing on assessments to pay for their portion of the California Fair Plan bailout.

Due to the continued shortage of admitted carriers, the non-admitted market has absorbed much of the exposure. High-risk areas such as Rancho Santa Fe, western Los Angeles, and parts of Orange County remain challenging for placement because of risk concentration. As a result, many non-admitted carriers are requiring enhanced mitigation measures, including home-hardening improvements, automatic water shut-off devices, and higher wildfire deductibles.

Auto rates are stabilizing in California with most insurance companies receiving the rate increases that had been submitted over the last several years to cover the increased vehicle repair costs. With the recent tariffs we may see auto rates increase near the end of the year due to increased costs associated with obtaining vehicle parts.

Carriers have begun receiving rate increases in California for excess liability (umbrella) policies. We expect insurance companies to continue to file and receive rate from the Department of Insurance as large punitive verdicts are still increasing exponentially. It will continue to be difficult to find high limits of liability as carriers continue to limit their exposure.

If you have questions about California insurance or your specific situation, give us a call.