USAA Casualty Insurance Co. implemented an average homeowners insurance rate increase of 25.9% in California as of Dec. 1, 2024, with some policyholders facing hikes as high as 48.5%, according to filings reported by AM Best.
The rate changes are part of broader adjustments across USAA Group's subsidiaries.
Between mid-November 2024 and February 2025, homeowners in California insured through United Services Automobile Association, USAA General Indemnity Co., and Garrison Property and Casualty will also see rate increases.
USAA General Indemnity enacted a 30.6% average rate hike in mid-November, while Garrison’s 25.5% increase will take effect at the beginning of 2025. United Services Automobile Association will raise rates by an average of 16.8%, effective mid-February.
USAA Casualty attributed the increases to adjustments in base rates and pending litigation tied to wildfire risks. The company noted that it relies on an underwriting model informed by wildfire data from the United States Forestry Service and a private vendor.
USAA's share of California’s homeowners insurance market has declined over recent years, dropping from 5.73% in 2019 to 5.4% in 2023. Despite this, the group’s direct premiums written increased significantly, reaching $741.7 million in 2023, compared to $523.1 million in 2019. However, its direct combined ratio worsened during the same period, rising from 96.46 in 2019 to 114.09 in 2023, according to AM Best data.
California’s insurance market has faced strain as insurers grapple with wildfire risks, climate change, and rising costs attributed to economic inflation. Delays in rate approval processes have also contributed to some companies reducing or ceasing operations in the state.
California’s insurance regulators are working on reforms aimed at easing these challenges. New rules submitted by Insurance Commissioner Ricardo Lara would permit forward-looking wildfire catastrophe models in rate calculations, a shift from the current reliance on historical loss data. If approved, these rules would also require insurers to write at least 85% of their comprehensive policies in wildfire-prone areas.
What impact will these rate increases have on homeowners and the broader insurance landscape in California? Share your thoughts in the comments below.
