California Insurance Rates Rise, Impacting 660,000 Residents

California homeowners are facing significant insurance rate increases as regulators have approved hikes for two major insurers, Mercury General and Safeco, affecting approximately 660,000 customers. Mercury General's rates will rise by an average of 12% starting in late March, while Safeco will see an average increase of 7.2% in May, with the latter company planning to exit the condo and renters market by 2026. Both insurers attribute the rate hikes to escalating construction costs rather than the recent wildfires, although the state was already experiencing an insurance crisis exacerbated by climate change and frequent natural disasters. State Insurance Commissioner Ricardo Lara has also approved an additional $1 billion in funding for the California Fair Plan to help pay wildfire claims, which may lead to one-time fees for policyholders. The financial strain on both consumers and insurers reflects the ongoing challenges in California's insurance market. Experts are concerned this situation may worsen, highlighting the growing impacts of climate change on insurance availability and affordability.