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Over 1.1 Million California Homeowners Face Property Insurance Rate Hike

Under state program, insurers pledge to cover more high-risk homes in exchange for rate increases.

Chris Schafer
Written byChris Schafer
Chris Schafer
Chris SchaferDeputy Managing Editor, News and Marketing Content
  • 15+ years in content creation

  • 7+ years in business and financial services content

Chris is a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more.

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Evelyn Pimplaskar
Evelyn PimplaskarEditor-in-Chief, Director of Content
  • 10+ years in insurance and personal finance content

  • 30+ years in media, PR, and content creation

Evelyn leads Insurify’s content team. She’s passionate about creating empowering content to help people transform their financial lives and make sound insurance-buying decisions.

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John Leach
Reviewed byJohn Leach
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John LeachLicensed P&C Agent, Senior Insurance Copy Editor
  • Licensed property and casualty insurance agent

  • 10+ years editing experience

  • NPN: 20461358

John leads Insurify’s copy desk, helping ensure the accuracy and readability of Insurify’s content. He’s a licensed agent specializing in home and car insurance topics.

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Published | Reading time: 1 minutes

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Insurance premiums for 1.1 million CSAA and Mercury customers in California are about to get more expensive. The rate increases come from a December regulatory approval that allows the two insurers to raise California policyholders’ rates by an average of 6.9%. This approval marks the latest in a string of hefty rate hikes for insurers across the state.

The approvals are the first under California Insurance Commissioner Ricardo Lara’s sustainable insurance strategy. In exchange for the rate increases, both insurers have committed to expanding coverage in underserved areas and areas with a higher risk of wildfire events.

For policyholders, it means a heftier bill now in lieu of future losses in riskier areas.

Increases will affect more than 1 million California policyholders

Mercury is the state’s third-largest insurer. When its rate increase begins in July, it will impact 650,000 policyholders. Home insurance rates will go up an estimated 8.2%. Condo owners will see an average rate increase of 8.3%, and renters an average rate increase of 6.3%.

Some Mercury policyholders’ rates could drop by as much as 10%, while others could go up by as much as 60% in certain areas, according to the San Francisco Chronicle.

CSAA’s rate increases will be less dramatic, with increases as high as 8%–10%. But these increases will occur sooner, starting March 15, for the company’s 480,000 California policyholders.

What’s next? Additional coverage for underserved areas

In exchange for the rate increases, both insurers have pledged to write additional policies in underserved or high-risk areas. But while rate increases will impact more than 1 million policyholders, the number of new, high-risk policies being taken on is far lower.

Mercury has agreed to add at least 2,000 more policies in underserved areas by July 2028.

The company has already added 200 new policies in Paradise, an area destroyed by the 2018 Camp Fire.

CSAA has pledged to take on additional policyholders as well, offering quotes to AAA users on California’s FAIR Plan to lessen the number of policies carried by the state’s insurer of last resort.

More than 646,000 California homeowners have a FAIR Plan policy, and the plan added 21,000 policies between September and December of last year.

Enrollment in the FAIR Plan has increased 140% since 2022.

Chris Schafer
Chris SchaferDeputy Managing Editor, News and Marketing Content

Chris is Insurify’s Deputy Managing Editor for news and marketing content. He’s a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more. He is passionate about breaking down complex subject material to make important information accessible to everyone. 

Chris began his career as a journalist, managing two weekly newspapers, then moving into marketing and content marketing roles. Before joining Insurify, Chris served as the content strategy manager at Siteimprove and as the content manager at Brandpoint, where he managed a team of content creators. 

Away from work, Chris is an active hockey player and proud father of two rambunctious little girls. Chris holds a Bachelor’s degree in English with a minor in mass communications from the University of Minnesota. 

Evelyn Pimplaskar
Edited byEvelyn PimplaskarEditor-in-Chief, Director of Content
Evelyn Pimplaskar
Evelyn PimplaskarEditor-in-Chief, Director of Content
  • 10+ years in insurance and personal finance content

  • 30+ years in media, PR, and content creation

Evelyn leads Insurify’s content team. She’s passionate about creating empowering content to help people transform their financial lives and make sound insurance-buying decisions.

Featured in

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John Leach
Reviewed byJohn LeachLicensed P&C Agent, Senior Insurance Copy Editor
Photo of an Insurify author
John LeachLicensed P&C Agent, Senior Insurance Copy Editor
  • Licensed property and casualty insurance agent

  • 10+ years editing experience

  • NPN: 20461358

John leads Insurify’s copy desk, helping ensure the accuracy and readability of Insurify’s content. He’s a licensed agent specializing in home and car insurance topics.

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