This commitment was reportedly influenced by an overhaul of the state’s insurance regulations by Insurance Commissioner Ricardo Lara earlier this year. (Credit: Oleksii/Adobe Stock)
The California Department of Insurance and Governor Gavin Newsom have announced that five homeowners insurance companies that had previously limited their business in the state or left California completely have committed to staying in the market. This move was reportedly influenced by an overhaul of the state’s insurance regulations by Insurance Commissioner Ricardo Lara earlier this year.
Newsom addressed the commitment from these insurers while speaking at the Clinton Global Initiative in New York on September 24. KCRA 3 reports that the governor shared this news after Bill Clinton asked what he thought should be done about the state’s insurance crisis.
"We just had four of our admitted market come back," Newsom reportedly told Clinton. "In the last two days or so we had our fourth come back in. We had a lot of folks who were leaving the market, they simply said it was too expensive and the losses are too significant."
The California Department of Insurance later confirmed to KCRA 3 that the governor’s remarks were accurate and that the list of insurers that have committed to staying in California included Mercury, USAA, CSAA, Pacific Specialty and California Casualty. Mercury and USAA never stopped writing coverage in the state, but have acknowledged adjustments made under the new California rules.
The revised California regulations allow insurers to consider the risk of catastrophe and reinsurance costs when setting rates. In return, the insurers must agree to increase coverage availability in areas that are at higher wildfire risk. This was all done in an attempt to alleviate the increased number of insureds who rely on California’s FAIR Plan, the state's insurer of last resort.
As of June, the FAIR Plan reported a total exposure of $650 billion — a 42% increase from September 2024 and a 289% increase from September 2021. The total number of dwelling and commercial FAIR policies in force grew from 240,123 in September 2021, to 610,000 policies in June 2025, with written premiums totaling $1.84 billion.
In the first nine months of FY2025, the FAIR Plan added more than 22,000 policies each month across dwelling and commercial lines.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.