Premiums raising for hundreds of thousands of single-family homeowners

Two Major California Insurers File for Homeowners Rate Increases Under Sustainable Insurance Strategy

By Jon Gustafson | May 6, 2026

Two of California’s largest homeowners insurance providers — the Interinsurance Exchange of the Automobile Club (the AAA-affiliated insurer for Southern California) and Travelers Insurance — have submitted rate filings to the California Department of Insurance (CDI) that would raise premiums for hundreds of thousands of single-family homeowners while delivering significant decreases for condo owners and renters.

Together, the two companies cover nearly 760,000 households in the state. The filings represent the first major rate applications from either carrier under California’s Sustainable Insurance Strategy (SIS), a sweeping set of reforms championed by Insurance Commissioner Ricardo Lara and finalized in 2025.

Inter-insurance Exchange of the Automobile Club (AAA SoCal)

- Single-family homeowners: Average increase of 11.2%

- Condominium owners: Average decrease of 20.5%

- Rental property owners: Average decrease of 27%

Individual impacts will vary dramatically. According to the filing, some homeowners could see their premiums drop by as much as 80%, while others face steep increases. One cited example showed a policy jumping from just under $1,650 per year to more than $13,100.

The Auto Club, the fourth-largest homeowners insurer in California by premiums written, has committed to writing more than 2,000 new policies in wildfire-distressed areas if the filing is approved.

Travelers Insurance (ninth-largest homeowners insurer in the state)

- Single-family homeowners: Average increase of 6.9%

- Renters: Average decrease of 17%

- Condominium owners: Average decrease of 22.8%

- Condominium landlords: Average decrease of 19.6%

Travelers’ changes are somewhat more moderate: roughly 60% of its homeowners would see increases between 5% and 10%, while just under a quarter could see decreases of up to 25%.

Why Now? The Sustainable Insurance Strategy Explained

California’s homeowners insurance market has been in crisis for years. Massive wildfires, skyrocketing reinsurance costs, inflation in construction materials and labor, and climate-driven risk have led major carriers to restrict new policies or exit high-risk areas entirely. The state’s FAIR Plan — the insurer of last resort — has seen explosive growth as private coverage becomes harder to obtain.

In response, Commissioner Lara’s Sustainable Insurance Strategy (announced in 2023 and refined through 2025) represents the most significant overhaul of insurance regulation in California in more than 30 years. Key elements include:

- Allowing insurers to incorporate forward-looking catastrophe models and actual reinsurance costs into rate calculations (previously restricted under older Prop. 103 rules).

- Requiring participating carriers to expand coverage in “distressed” wildfire-prone communities.

- Streamlining the rate-approval process while maintaining consumer protections.

- Aiming to reduce reliance on the FAIR Plan and restore a competitive, sustainable private market.

In exchange for more realistic pricing, insurers must commit to writing new business in high-risk areas. More than half a dozen carriers have already filed under the strategy, with most approved increases hovering around the 6.9% mark. Filings of 7% or higher can trigger mandatory public hearings demanded by consumer groups.

Company Perspectives and Commitments

The Auto Club of Southern California emphasized its long-standing roots in the state (founded in 1900) and its commitment to stability.

“As a company founded in California more than a century ago, we believe helping to ensure insurance sustainability is the right thing to do for our members and for the future of our state,” said Mike Mohamed, Senior Vice President of Insurance Operations. “We diligently support the Department of Insurance’s efforts to stabilize California’s insurance market.”

Travelers announced its voluntary participation in the SIS in late April 2026, stating it would expand homeowners insurance availability statewide. The company has indicated it already maintains a similar proportion of policies in distressed areas as it does statewide and plans to write additional new business if the current filing is approved.

What This Means for California Homeowners

While headlines have focused on “massive rate hikes,” the reality is more nuanced: average increases for single-family homes are in the single digits to low double digits, but the range of individual outcomes is extremely wide due to risk-based pricing that now better reflects wildfire exposure, property characteristics, and mitigation efforts.

Homeowners who have invested in wildfire mitigation (defensible space, hardened homes, etc.) may qualify for discounts that can offset or even reverse increases. Conversely, properties in the highest-risk zones without upgrades could see the largest jumps.

Consumer advocates have long warned that even moderate statewide averages can translate into painful bills for middle-class families already strained by high housing costs. At the same time, the strategy is designed to prevent a total market collapse that would force even more residents into the expensive and limited FAIR Plan.

Next Steps and Broader Outlook

The CDI is now reviewing the filings. Approval timelines are not yet public, but if approved, the new rates could take effect later in 2026. Additional filings from other carriers are expected as the SIS continues to roll out.

This latest development is part of a broader national conversation about insurance affordability in an era of climate change. California — home to some of the country’s most expensive real estate and most destructive wildfires — is serving as a high-stakes testing ground for whether updated regulations can balance consumer protection, market stability, and risk reality.

For now, California homeowners are advised to review their current policies, explore mitigation incentives, and monitor CDI updates closely. Those facing potential large increases may want to shop around or consult independent agents as the market continues to evolve.

Sources for the Article

- San Francisco Chronicle (May 1, 2026) – Primary & most detailed source

[“Two of California’s largest insurers seek new rate hikes”](https://www.sfchronicle.com/california/article/aaa-travelers-home-insurance-22236797.php)

- New York Post (May 3, 2026) – Popular headline version

[“Two major California insurers plot massive rate hikes”](https://nypost.com/2026/05/03/real-estate/two-major-california-insurers-plot-massive-rate-hikes-bringing-misery-for-nearly-1m-homes/)

- Auto Club of Southern California Official Press Release (May 2026)

Rate filing announcement and commitment details

- Travelers Insurance Official Press Release (April 24, 2026)

Announcement of participation in Sustainable Insurance Strategy

- California Department of Insurance (CDI) – Official Rate Filings & Sustainable Insurance Strategy documents

- San Gabriel Valley Tribune (May 6, 2026)

Additional coverage on rate changes and expanded coverage

- Yahoo Finance (syndicated from SF Chronicle)

All key facts (percentage increases, number of households affected, condo/renter decreases, and SIS context) are directly supported by the filings reported in the San Francisco Chronicle and company statements.