Mercury Insurance is preparing a homeowners’ insurance rate filing that incorporates the California Department of Insurance’s (CDI) newly approved Verisk Wildfire Model.
The filing aligns with the department’s Sustainable Insurance Strategy, which allows the use of forward-looking catastrophe models in rate development and aims to address insurance availability in wildfire-prone areas.
The insurer said the updated regulatory framework could support broader coverage offerings in regions where wildfire risk has limited market participation.
“The leadership of Commissioner Ricardo Lara and his department in instituting the sustainable insurance strategy is a big step forward in allowing insurance companies to expand and strengthen their insurance coverage options throughout California,” said Gabriel Tirador, Mercury’s CEO. “This balanced, science-based initiative will unlock the ability for us to expand the areas where Mercury is able to offer homeowners’ insurance.”
Mercury began writing new homeowners’ policies in Paradise, California, in late 2023, before the CDI formally adopted the wildfire model framework. The town was heavily impacted by the 2018 Camp Fire. The company said that its return to the area followed discussions with regulators, local officials and community groups.
The insurer has increased its involvement in California’s property insurance market, with plans to expand coverage in wildfire-affected areas and develop a broader approach to catastrophe risk management. Mercury has grown its market share in the state’s homeowners’ multiperil segment for five consecutive years, reaching 6.67% in 2024 and becoming the third-largest writer in the market.
Steve Bennett, senior director of climate and catastrophe science at Mercury, said the recent wildfires in the Los Angeles area have reinforced the company’s plans to build internal climate science capabilities to support its risk management strategy.
The Sustainable Insurance Strategy is part of the department’s broader efforts to address challenges in the property insurance market, where increased wildfire exposure has led several insurers to limit new business. The strategy also allows insurers to consider mitigation efforts and community-level resilience in underwriting and pricing.
