California homeowners with ASI Select insurance policies could see their premiums jump by 30% when their policies come up for renewal in 2025. On Nov. 26, the California Department of Insurance (CDI) approved ASI’s request for the double-digit rate increase that will affect more than 36,000 homeowners in the Golden State.
The rate hike will increase annual premiums for ASI customers by $339 to $882. ASI’s average annual premium will go from $1,907 to $2,480, according to the insurer’s filings with the CDI.
Additionally, ASI plans to non-renew 5,484 policies in areas with high wildfire risks.
Homeowners facing the biggest increases
While most affected policyholders will see rate increases of 30%, some will face significantly higher hikes. For 524 policyholders, rates will increase more than 30%, with 45 homeowners facing rate increases of 35% to 38%.
Policyholders in Playa del Rey, a neighborhood of Los Angeles, will experience the largest premium increases under ASI’s approved rate change. They could see their policy costs increase by as much as $3,154 — reaching an annual premium of $11,655.
Beverly Hills residents face the second-highest average increase, at $2,544.
What’s next: Rates will continue to rise
Climate catastrophes and inflation are pushing home insurance rates higher across the country. In California, the average annual cost of homeowners insurance was $1,782 in 2023, according to a report by Insurify. And Insurify data analysts predict rates will rise 8% in California through 2024.
California’s insurance market has been in crisis for years, with high construction and materials costs and escalating risks from severe weather and wildfire prompting some insurers to cut back on how much business they do in the state. Other insurers left California altogether. Insurers that have stayed have begun seeking — and obtaining — double-digit rate increases.
California Insurance Commissioner Ricardo Lara launched the state’s Sustainable Insurance Strategy in 2023 in an effort to stabilize the state’s insurance market.
Under the plan, regulators granted insurers approval to use predictive modeling — computerized processes that simulate thousands of possible natural catastrophes — to help set rates. In exchange, insurers must commit to writing at least 85% of their business in areas state regulators classify as “distressed” due to a high number of properties covered by the state’s insurer of last resort, high wildfire risks, and other factors.
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