Mercury Insurance Isn’t Leaving California, CEO Says

Mercury Insurance CEO Gabriel Tirador is reassuring California residents that the company isn’t going anywhere anytime soon.

Tirador, joined by California Insurance Commissioner Ricardo Lara, told the audience at the Global Sustainable Insurance Summit in Long Beach last month that Mercury — one of the largest insurers in the state — is committed to serving customers in Southern California, KCAL reported.

“We want to do it prudently, but yes, we want to grow both homeowners and auto in California,” Tirador said.

Insurance companies like Mercury and State Farm — California’s largest insurer — have achieved rate hikes in the wake of the deadly Palisades and Eaton fires. Tirador explained that Mercury’s gross loss from the fires totaled nearly $2.2 billion, while the company’s capital was about $2 billion.

“The higher costs we have have to be passed on [to consumers] at some point. What’s really important is the risk mitigation,” Tirador said. “The more that homeowners can do to mitigate their risk and harden their homes, the more discounts we can provide them.”

“There are folks who think they live two miles down from the wild land area and they’re not exposed, but look at what happened in Altadena,” he added.

Mercury is among more than 200 insurers currently facing two lawsuits for alleged price gouging and collusion both before and after the wildfires.

Homeowners claim the insurer joined forces with State Farm, Farmers and others in a “group boycott” to cancel policies in fire-prone areas like the Pacific Palisades, Malibu and Altadena in early 2023, the Los Angeles Times reported.

The purported actions forced the residents to join the state’s FAIR Plan, operated by the state’s licensed home insurers like Mercury, paying more in premiums for less coverage. Lara cleared the way for insurers to surcharge residential and commercial policyholders if the FAIR Plan ran out of money, which it did in February. The plaintiffs view that deal as a “determination to act collusively.”

— Chris Malone Méndez