An 11-year review of insurers’ filing data for homeowners insurance multiperil coverage in California shows intermittent years of poor results. These losses led to an aggregate underwriting loss for most insurers writing homeowners coverage in the state, according to AM Best’s report.
During the same period, insurers across the United States collected $1.2 tn in homeowners premiums and paid approximately $1.1 tn in loss claims and related expenses. These national totals include California.
In California, 37 insurers paid more in claims and related expenses than they collected in premiums over 11 years, while 23 insurers collected more than they paid (see U.S. Homeowners Insurance Claims for Lightning Losses).
State Farm, the largest writer of homeowners coverage in California, collected $19.6bn in premiums and paid approximately $20.4bn in claims and related expenses. Other insurers among the 37 that paid more than they received include Farmers Insurance Group, CSAA Insurance Group, Liberty Mutual Insurance Companies, and USAA Group.
Allstate collected $7.5bn in direct premiums over the period and paid approximately $7.4bn in claims and related expenses. Among the 23 insurers that recorded a positive underwriting result in California were Auto Club Enterprises Insurance Group, Pacific Specialty Insurance Group, QBE North America Insurance Group, and Assurant P&C Group.
Nationally, 209 property/casualty insurers collected more in premiums than they paid in claims and related expenses during the 11-year period, while 143 paid more than they collected. These figures include business written in California.
State Farm, the largest homeowners insurer in the U.S., performed better nationwide, collecting $216.7bn in premiums and paying $209.0bn in claims and related expenses. These figures also include business in California.
In 2017, homeowners insurers in California recorded a direct combined ratio of 241.51, followed by 214.83 in 2018. Both years saw major wildfires, including the 2018 Camp Fire, the deadliest wildfire in the state’s modern history.
Average U.S. homeowners insurance premiums have increased at a rate that has outpaced household income from 2004 to 2024, according to a report by Insurance Research Council (IRC). In 2024 – the latest year for which data is available – homeowners spent an average of 1.99% of their income on homeowners insurance, up from 1.54% in 2004.
Affordability of homeowners insurance varies significantly across states and has fluctuated over time. Utah was the most affordable state, while Florida ranked as the least affordable.
AM Best’s P&C State/Line Field Descriptions define the direct combined ratio as a measure of overall underwriting profitability. It sums the direct loss and loss adjustment expense ratio, the direct policyholder dividend ratio, and the underwriting expense ratio. A direct combined ratio below 100 indicates an underwriting profit.
Loss calculations were based on direct premium written multiplied by the direct combined ratio, aggregated for each insurance group or unaffiliated single company.
