Share
California Automobile Insurance Company won state approval for a 12% rate increase that will affect nearly 600,000 homeowners, condo owners, and renters in the Golden State.
The rate hike, which will spawn an average annual premium increase of $236.50 for CAIC homeowners policies, takes effect on March 26. It will apply to new and renewing policies.
CAIC is the fifth insurer in recent months to receive approval from the California Department of Insurance (CDI) to increase property insurance rates.
The CDI approved an overall rate increase of 12% for CAIC, but percentage increases vary by policy type. Californians with HO-3 policies (homeowners insurance) will see an increase of 12.3%, while those with HO-6 (condo) policies are in line for a 9.4% increase. HO-4 policies (renters insurance) are subject to the lowest increase — 7.5%.
Average annual premium increases for 441,761 affected homeowners range from $76.86 to $237.90. The total average premium increase for 70,223 condo owners will be $80.57 per year, according to CAIC’s rate filing. And 85,935 renters will see little to no impact from the rate increase.
CAIC cited “poor loss experience” as driving its request for rate increases.
In the last quarter of 2024, the CDI approved multiple rate increases for insurance companies selling homeowners, renters, and condo insurance in California, including:
USAA: 16% increase for homeowners policies and 31% for condo owners policies
USAA Casualty Insurance Company: 25% for homeowners and 40% for condo owners
Amica: 21% for homeowners, 4.5% for condo owners, and 1% for renters
American Modern Home Insurance: 42.2% for renters insurance
MAPFRE Insurance Company: 6.5% for homeowners insurance
Altogether, the approved increases affect more than 967,000 policyholders in the state.
California’s property insurance market has long been in crisis. A tight regulatory environment and catastrophe-driven losses inspired multiple insurance companies to reduce or eliminate the business they did in the state.
But under Insurance Commissioner Ricardo Lara’s Sustainable Insurance Strategy, the state has implemented regulatory changes aimed at making it easier and more rewarding for property insurers to operate in California. Among the measures:
Insurers may now use predictive modeling (which uses damage projections rather than historical experience data) in rate-setting.
Insurance companies must increase the amount of business they do in wildfire-prone regions, reaching at least 85% of their statewide market share.
Capping the amount of reinsurance costs companies can pass on to policyholders.
The CDI says these regulatory changes will help stabilize California’s home insurance market and ensure property owners have more insurance options. At least one insurer has resumed doing business in California.
Farmers Insurance announced in December 2024 that it would begin increasing the number of new home insurance policies it sells in the Golden State by 2,500 per month. In 2023, the insurer limited the number of new home insurance policies it would issue in California and paused new policies entirely for its other property insurance lines.
)
)
10+ years in insurance and personal finance content
30+ years in media, PR, and content creation
Featured in
){kind=logo}
){kind=small}
){kind=small}
)
15+ years in content creation
7+ years in business and financial services content
Featured in
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
)
Licensed property and casualty insurance agent
8+ years editing experience
NPN: 20461358
Featured in
){kind=small}
At Insurify, our goal is to help customers compare insurance products and find the best policy for them. We strive to provide open, honest, and unbiased information about the insurance products and services we review. Our hard-working team of data analysts, insurance experts, insurance agents, editors and writers, has put in thousands of hours of research to create the content found on our site.
We do receive compensation when a sale or referral occurs from many of the insurance providers and marketing partners on our site. That may impact which products we display and where they appear on our site. But it does not influence our meticulously researched editorial content, what we write about, or any reviews or recommendations we may make. We do not guarantee favorable reviews or any coverage at all in exchange for compensation.
15+ years in content creation
7+ years in business and financial services content
Featured in
Licensed property and casualty insurance agent
8+ years editing experience
NPN: 20461358
Featured in
)
)
)