Mercury Insurance, the third largest home insurer in California, submitted a request for a rate hike on Friday — the first filing to utilize new state reforms that alter how insurance companies can price for wildfire risk.
The filing asks regulators to approve a statewide increase of 6.9%, according to the company. The full details of the filing were not available online as of Friday afternoon.
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In a statement, Mercury said the increase was necessary to compensate for the insurer’s exposure to wildfire risk and inflation that drives up the cost of paying claims. Each homeowner’s exact rate change will depend on their wildfire risk — some may see increases that are lower than the average, or even decreases; others’ rates will rise above the average.
The company said it would also offer new discounts for wildfire mitigation work, such as installing ember-resistant vents or clearing out brush, which could reduce customers’ wildfire portion of their premiums by as much as a third.
Mercury is the first company to submit for a rate increase under the Sustainable Insurance Strategy, a package of reforms spearheaded by Insurance Commissioner Ricardo Lara aimed at making insurance more available in California. The reforms allow insurance companies to begin using forward-looking models of wildfire risk to influence premiums and to pass along some of the cost of reinsurance — insurance for insurers — to customers.
These reforms were widely expected to lead to rate increases, but also come with a requirement for companies to write more policies in high wildfire-risk areas if they don’t do so already.
Last year Mercury confirmed to the Chronicle that it would be among the companies that would be required to write more policies under the new regulations. In anticipation of the reforms being finalized, it announced plans to insure more than 200 homes in Paradise (Butte County), site of the 2018 Camp Fire.
Over the past few years, Los Angeles-based Mercury has scaled up its presence in California’s home insurance line, rising from the seventh largest home insurer in 2021 to the third largest in 2024 behind State Farm General and Farmers Insurance Group.
Over that same period, Mercury has raised home insurance rates four times — a 6.9% increase in 2021 followed by a 12.6% increase in 2023, a 7% increase in 2024 and another 12% increase that went into effect in March.
Let’s see Il Duche (aka Slick) has a voter approved mandate to bring back strong forest management that includes prescribed burns, fire breaks, and buffer zones from forests and urban encroachment.
He has not done any of it, and with the really stupid RHNA HIGH DENSITY with “BUILDERS REMEDY” there is little hope for insurance rates.
But then again Il Duche forced on the state minimum wages that are putting out of businesses small middle class retails, as well as increasing Kalif. inflation rate and an un-employment rate that is reported to be in the 6%ish rate while the national rate is 4%ish.
So much for the great Socialist State of Kalif.
Inflation, un-employment, insurance rates. Yes you idiots voted for them.