1. State Approval for Rate Increases
• Many admitted insurance carriers in California have recently been approved to raise rates.
• These increases allow them to take on more business again, after years of pulling back.
• Previously, many stopped writing new policies entirely (since around 2020), while a few carriers maintained closer ties to the market and could raise rates incrementally.

2. Cash Flow Requirements
• The state requires certain carriers to maintain a set daily minimum of liquid assets (e.g., $35 million or more) to ensure they can pay claims.
• This rule affects how aggressively they can write new business. If reserves drop too low, they have to stop taking on new customers.

3. Impact on Consumers
• When carriers drop policies:
o Homeowners with mortgages must keep insurance. If dropped, they need to quickly find new coverage.
o Those who own their homes outright can choose to go uninsured, but that’s a personal risk.
• Lender-placed insurance:
o If a borrower fails to provide proof of insurance, the lender can buy a force-placed policy.
o These policies are usually more expensive and provide less coverage (often only protecting the lender’s interest in the structure, not contents or liability).
o Lenders will notify borrowers multiple times before force-placing coverage.
o Sometimes borrowers think their mortgage company is paying their renewal premium (impounded), but if it’s not via escrow, they’re responsible — and missing payment can lead to cancellation.