The California Department of Insurance (CDI) approved the nation’s first forward-looking catastrophe model for wildfire risk, developed by Verisk. Since then, CDI has completed its review and approval of two additional forward-looking models from Karen Clark & Company and Moody’s. The approval of these advanced tools marks a critical milestone in the Department’s Sustainable Insurance Strategy (SIS), which is designed to promote long-term rate stability and expand access to homeowners’ insurance, particularly in wildfire-prone communities.
In response to these approvals, insurers, including Mercury, CSAA Insurance Group, USAA, Pacific Specialty, and California Casualty are actively pursuing SIS rate filings with CDI, signaling renewed confidence in the state’s evolving regulatory framework. Their decision to expand coverage is a positive step toward easing the insurance availability challenges that have intensified in recent years due to the growing frequency and severity of wildfires.
These recent developments represent meaningful progress toward rebuilding a more resilient and competitive insurance market in California. By embracing cutting-edge catastrophe modeling, the state is enabling insurers to more accurately assess and price wildfire risk, benefiting both carriers and consumers. More insurer announcements are expected in the coming months, and the Department remains committed to working with stakeholders to ensure the Sustainable Insurance Strategy will deliver results that improve stability, transparency, and access for all Californians.
