If you own a home in the San Fernando Valley, insurance is probably the bill you think about least and notice only when it jumps. It is about to jump.
On July 1, Mercury, one of the largest home insurers in California, began rolling out an average 6.9% rate increase across more than 650,000 homeowner policies statewide. Mercury is not alone. It is one of two major carriers approved for that increase this year, and the pattern is bigger than any single company.
Here is what is actually going on, and what you can do about it before your renewal lands.
Why rates are moving
The increases are not random, and they are not just carriers being greedy. California spent years watching insurers pull back or leave the state entirely because they were not allowed to price for real wildfire risk. The state's new Sustainable Insurance Strategy changed that. In exchange for letting carriers factor in catastrophe modeling and reinsurance costs, the state is requiring them to write more policies in higher-risk areas. Mercury, for one, committed to writing tens of thousands of new policies, including in wildfire-distressed neighborhoods and by taking homeowners off the FAIR Plan.
Translation: higher premiums are the price of a market that actually functions. A carrier that will insure your home at a higher rate is worth more to you than one that will not insure it at all.
The part that matters for your wallet
The 6.9% is an average, not a rule. Your actual change depends heavily on your wildfire risk score. Some homeowners on the Valley floor could see a smaller bump. Homes closer to the hillsides and brush could see much steeper increases. Two houses a few miles apart can land in very different places.
One wrinkle worth knowing: under Mercury's filing, it is single-family homeowners carrying the increase. Condo and renter policies actually average a decrease. So if you own a condo in the Valley, this particular change may cut in your favor.
Your July playbook
If you own a home in the Valley or anywhere in LA, here is what I would do right now.
First, remarket before you renew, not after. The single most effective habit for homeowners facing an increase is to shop your coverage 60 to 90 days before your renewal date. The admitted market is slowly reopening in Los Angeles, which means more carriers are writing again than a year ago. You may have options you did not have last renewal.
Second, document your mitigation. Mercury and other carriers are rolling out new and expanded wildfire discounts for homes with defensible space and hardening features like ember-resistant vents, a Class A roof, and cleared brush. If you have done that work, make sure your carrier knows and that you are getting credit. If you have not, some of it is a weekend and a few hundred dollars that can lower your premium for years.
Third, do not let a FAIR Plan policy sit on autopilot. If you are on the state's FAIR Plan, know that it is under real pressure and real reform. Lawmakers are moving a bill this year, the Make It FAIR Act, aimed at fixing claims handling and transparency after the 2025 fires exposed serious problems. It is still working through Sacramento and is not yet law. In the meantime, the FAIR Plan was designed to be temporary coverage, not a permanent home. If the admitted market has reopened for your area, that is worth checking.
Why I am telling you this
I do not sell insurance, and I do not earn a dime from your policy. I am telling you this because insurance is quietly becoming one of the biggest factors in whether a Valley home is affordable to own and easy to sell. Buyers now ask about insurability before they write offers. Sellers who can hand a buyer a clean, reasonably priced policy have a real advantage. If you are even thinking about a move in the next year, your insurance situation is part of your home's value story, and it pays to get ahead of it.
If you want a straight read on how your insurance picture affects your home's marketability, or you just want a referral to an independent broker who shops multiple carriers, reach me at (818) 697-4884 or [email protected].
Sources: California Department of Insurance and Insurance Journal, 2026; Mercury rate filing effective July 1, 2026.
