USAA, the seventh largest home insurer in California, has filed a request to increase home insurance rates by an average of 7.3% starting next year. If approved, the rate changes would affect nearly 350,000 USAA customers at their first renewal date following April 30, 2026. Condo owners will not face any increases under the proposed changes.
The rate hike request comes amid rising home values, repair costs, and severe weather conditions affecting the insurance market. Currently, the average USAA policyholder pays $2,428 annually, and the proposed increase would raise the average premium by $178. However, homeowners in high-risk areas, such as Malibu, could see significant increases, with some premiums rising by over $4,800 annually.
USAA’s request utilizes new reforms by the California Department of Insurance, allowing insurers to use forward-looking catastrophe models to price wildfire risks. These models are expected to lead to higher rates but also require insurers to maintain coverage in wildfire-prone areas. According to the San Francisco Chronicle, USAA has committed to maintaining its current level of coverage in these areas.
Despite the proposed rate increases, USAA has expanded its presence in California and remains committed to serving military members and their families. A spokesperson for USAA noted that homeowners who complete wildfire mitigation efforts can qualify for premium discounts.
The California Department of Insurance has been working to stabilize the insurance market with reforms that encourage insurers to expand coverage in high-risk areas. Commissioner Ricardo Lara stated, “We are on time and on target for bringing insurance options back to all parts of California.”
The request follows previous rate increases by USAA subsidiaries earlier this year, with some rates rising by as much as 60%. The decision on the rate hike is pending approval from the California Department of Insurance.
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