CSAA Insurance Group has filed for a 6.9% increase in homeowner insurance rates in California, citing inflation and the rising frequency and severity of wildfires and other natural disasters as key factors behind the request.
The insurer’s filing outlines several initiatives aimed at supporting the state’s efforts to reduce reliance on the California FAIR Plan, the insurer of last resort.
CSAA said it will begin offering quotes to AAA members in Northern California who currently hold FAIR Plan policies, as part of a broader plan to help depopulate the FAIR Plan and expand private market coverage in the state.
CSAA is also introducing the “My Home Hardening” program, which will provide discounts of up to 12.5% to homeowners who complete wildfire mitigation projects and earn the Wildfire Prepared Home designation from the Insurance Institute for Business and Home Safety (IIBHS).
Homeowners who meet the prepared home designation and other policy requirements will be eligible to maintain coverage for at least three years, according to the company. This incentive is targeted at policyholders in higher-risk wildfire areas.
Additional proposed changes include discounts for installing water detection and valve shut-off devices, as well as new coverage options for buried utility lines and equipment breakdown. CSAA saidd that these measures are part of its response to California Insurance Commissioner Ricardo Lara’s Sustainable Insurance Strategy.
California’s insurance landscape has seen a notable shift in recent years, with surplus lines carriers increasing their share of the homeowners insurance market from 0.5% in 2023 to 3.8% in 2024, now matching the FAIR Plan’s share.
This growth reflects the challenges faced by traditional insurers in high-risk regions and the expanding role of surplus lines carriers in providing coverage where admitted carriers have pulled back.
According to expert insights from IB+ Data Hub, the average premium per transaction in California’s surplus lines market reached $19,649.86 in December 2024, marking a 21.52% increase from the previous year.
CSAA Insurance Exchange has experienced a 70.4% increase in surplus lines premium in 2024, the largest among leading carriers in the state. This surge is attributed to escalating claims, inflationary pressures, and the company’s efforts to improve underwriting profitability through rate increases and new initiatives.
The company said its actions are designed to align with state policy objectives while addressing the ongoing challenges facing California’s insurance market. CSAA’s filing did not specify when the proposed rate increase would take effect, pending regulatory review.
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