LOS ANGELES, Calif. (Aug. 15, 2025) - Mercury Insurance (NYSE: MCY) has submitted a rate filing for its California Homeowners program based on the State's Sustainable Insurance Strategy. The filing is the first to use the recently reviewed Verisk Wildfire catastrophe model, which helps estimate the impact of future catastrophic wildfire events. Once approved, this filing will allow the Company to grow its footprint in higher wildfire risk areas.
Mercury's new rating plan will strengthen the Company's ability to offer coverage to Californians in distressed areas prone to wildfires, many of which are currently limited to the high-cost, limited-coverage California FAIR Plan, which has historically been the insurance plan of last resort provided for homeowners living in these areas.
"Commissioner Lara's Sustainable Insurance Strategy (SIS) will help stabilize the California homeowner's insurance market," said Gabriel Tirador, Mercury's CEO. "Our filing is the first step toward Mercury's goal of expanding insurance options for California homeowners and underscores our 60-year commitment to California customers and agents. As other companies scaled back their California operations, Mercury stepped up to provide more options for our agents and customers, and we are committed to continuing our efforts to help protect our California neighbors well into the future."
The rate filing calls for an overall average rate increase of 6.9 percent, reflecting increased inflationary cost pressures and exposure related to catastrophic events such as wildfires. The rate increase won't be allocated evenly across all policyholders, however, as residents in higher risk areas could see larger increases, while customers in lower risk areas could see decreases. To combat increases for customers in higher risk areas, Mercury is implementing a number of discounts that could mitigate the increase while making homes and communities safer.
Mercury will expand existing discounts for homeowners who take steps to reduce wildfire risks. The discounts will be based on efforts such as clearing vegetation, upgrading vents and/or using fire-resistant construction materials.
On a broader level, living in a fire-prepared community that takes "collective steps" to mitigate wildfire exposure by managing surrounding brush, mandating specific home hardening requirements - along with a range of other infrastructural requirements - provides an additional discount.
Beyond these discounts - which could save up to a third on the wildfire portion of their premium - FAIR Plan policyholders will be provided with more options for coverage and will not have to consider additional insurance (such as a Difference in Condition policies that cover events other than wildfires, including water damage, personal liability, and theft) to fill the gaps of their FAIR Plan policy.