Mercury Insurance seeks 6.9% California homeowners rate hike using newly approved Verisk model

By Navneeta Nandan

Aug 18 - (The Insurer) - Multiple-line insurance carrier Mercury Insurance has used the Verisk Wildfire catastrophe model and submitted an overall average rate increase of 6.9% for its California homeowners program based on the State's Sustainable Insurance Strategy.

This filing is the first to use the Verisk model, which estimates the impact of future catastrophic wildfire events.

Its rate filing reflects increased inflationary pressure and exposure related to catastrophic events including wildfires. The rate changes will vary with the intensity of risk in different areas.

After approval of this filing, Mercury said that the rating plan will strengthen its 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," Gabriel Tirador, Mercury's CEO, said.