Navigating California’s Hardening Marketplace
Author, Casey Craig, Account Executive, Rancho Mesa Insurance Services, Inc.
California’s insurance market has shifted dramatically in recent years, creating challenges for both carriers and insureds. While premium increases are often the most visible sign of a hard market, the underlying issues are far more complex.
Market Contraction and Volatility
From 2020 to 2025, many carriers have either exited California or significantly reduced the lines they write. Factors such as wildfires, theft, rising repair and rebuild costs, cumulative trauma claims, and nuclear verdicts have made predicting losses increasingly difficult. This volatility has led carriers to tighten underwriting standards and decline new business more frequently.
Litigation and Its Ripple Effect
Escalating litigation rates have amplified the problem. Even minor claims are resulting in outsized settlements, driving up costs for carriers and insureds alike. This cycle, higher premiums leading to more lawsuits leading to higher premiums, has created systemic pressure across the industry.
Impact on Reinsurance and Rate Filings
The reinsurance market has also tightened, with some reinsurers refusing to cover certain industries, implementing new exclusions. Your carrier partner needs to share risk in the reinsurance marketplace to insulate themselves. So, these changes are trickling down. Compounding the issue, carriers often wait years for rate approvals from the Department of Insurance, leaving filings outdated and misaligned with current exposures.
What This Means for Businesses
In this environment, partnering with a broker and carrier that specializes in your industry is critical. Carrier appetites are changing rapidly, and exclusions can appear without notice. A knowledgeable broker can help position your business effectively, secure competitive pricing, and ensure coverage aligns with your risk profile.
For questions or to discuss your insurance strategy, contact me at ccraig@ranchomesa.com or (619) 438-6900.